I've got the same problem with my localhost installation, except that it's the image Alt text specifically that shows in place of the image.

Edit: Nvm, I need to have mod_rewrite to get imagecache working which was the source of the problem.[/quote]

That's the same issue on demo.ubercart.org. the ALT text shows instead of the image. The text links to a thickbox view of the image though.