Such problems may come from some lack of permissions or handler mappings, which are not set properly. Make sure you have configured properly IIS
and run Firebug when accessing the page to see what errors come up in Net tab. By default when you install IIS you enable static content which serves the files that are being exchanged though the services ( for example upload in Sitefinity ). If you want to upload specific file formats you have to add them manually. Please refer to the handler mappings section of your IIS control panel and check if you have the correct mappings for image files (jpg, jpg.tmb).
On your second question, I believe you aren't able to upload images from a folder with the name Images, because in Sitefinity Images folder is reserved. Renaming your folder will make it accessible through our UI. You also asked for a setting which allows you to pick image out
of the database or from your file system.
All images, uploaded to Sitefinity are saved to the database by default. When you're using an image widget, for exaple, you can pick from two possible options: Use already uploaded images (located in the database), or upload new ones (from your file system). This however, is not the only available scenario. Which leads us to your last question: Can we just save image files to the disk?
Yes, there is a way to save files in your file system, instead of saving them in the database. To do so, you need to create a custom storage provider. Take a look at our documentation
for detailed steps to achieving this.
the Telerik team
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