My Solution (WordPress 2.0.5 Ronan)
Edit inline-uploading.php
Change line 232 to read:
$thumbtext = $__using_original;
Change line 251 to read:
<img id=\”image{$ID}\” src=\”{$image[‘guid’]}\” alt=\”{$title}\” $height_width />
Line numbers are approximate, I believe 2.0.4 for example is 2 out for both, 230 and 249 respectively
