As I told I will get back on this topic as soon as I hear more about these new operators. Here are all the details you need to know.
1. This feature will work with newly uploaded images
What does this mean to you? Once image is uploaded and rendered and you try to change the settings image will not change its properties. Make all the changes and settings before uploading the image. Any changes afterwards will not affect image settings
2. You will see "source-type" attribute for IMAGE operator and image-type for IMAGE-REF operator, this attributes will take following values: jpeg, :gif &
ng (it is "png" ": p" turns to a smiley face)
This will help you selectively target where you wish to show different format of images and even with some custom programming provide merchants the ability to specify what format they wish to see on particular pages. Mike this should help with your concerns about some images not looking good when converted to gif. This would be helpful for merchants who need some of the images be shown as jpeg and rest as gif for page load performance. The above mentioned issue will still remain so merchants will have to re-upload the images after the programming is completed for newer settings to take effect.