Despite my earlier curmudgeonly grumbling, once I got it all up and running, the new image rendering facility in LyX-1.2.0pre4 with xforms-89.6 is nifty, at least for Postsript images. I do find that rotation of images, at least in files created under lyx-1.1.5, causes some problems. When the lyx looks like this:
\begin_inset Figure size 226 180 file photos/80-1092.ps width 1 8 angle 270 flags 9 \end_inset the image is rendered but not properly rotated, and the error output is: In RotateMatrix [image_rotate.c 239] InternalError: bad special angle -- Ronald Florence www.18james.com
