I've known about ImageMagick for a while, and I've been looking for a chance to try it out. If you haven't run across it, it's a command-line image processing tool, and having finally played with it for a facebook app, I'm very impressed!
It's installed everywhere
I was very pleasantly surprised to find that my dreamhost account already had version 6.2 pre-installed. Even more surprising, my old and usually-sparse WebHSP server does too! This meant no messing around trying to build it from source, or install the binaries and deal with dependencies. The only disappointment was finding that it wasn't built in to OS X on my home machine, though there are binaries available of course.
It's heavily used
The framework is in its sixth version, and it's obviously being used by a lot of people. This gives it two big advantages; there's been a lot of testing to catch bugs, and there's some great documentation available. I particularly love the usage documentation. It's bursting at the seams with examples solving practical problems, and that's the way I learn best.
It's both elegant and full of features
It must have been a tricky balancing act to get through six versions, with all the change in people and requirements, and keep the conventions for all the commands consistent, whilst constantly adding more. The way the image flow is specified is necessarily pretty hard to visualize, since it's inherently a tree structure that's been compressed into a line of text, but since all the operations work with the flow in the same way, it's possible to figure out what's going on without referring to the documentation on specific options.
The features include a wide and useful range of built-in filters, and a variety of expansion mechanisms. The only thing I missed was a filter plugin SDK, it would be nice to add to the current set using third-party operations.
I haven't measured performance quantitatively, but I've been experimenting with doing heavy operations on large arrays of images across the web, and I haven't seen any lag yet.
As an example, here's how to call ImageMagick to generate a thumbnail through PHP. I stole this from the excellent dreamhost support wiki, and you'll need to make sure you can exec() from your version of PHP if you're on another hosting provider.
$convert=$location . ' ' .$command . ' ' . $name . $extfrm . ' ' . $name . $extto;
print "<img src=" . $output . ">";