There appears to be a bug in the way the files are named with the "micro" option turned on and displaying the "micro" instead of the numbered images.
When the auto resize is created, the images are uploaded with a trailing "2_1_.jpg" instead of "2_1.jpg" The trailing underscore makes it so that the method LookupProductImage it seeks an image with "2_1.jpg" and not one with the trailing underscore. This leads to the "nopicture.gif" being presented instead of the correct image even though the admin has been used to generate these images.