The Dynamic Display Block doesn't work with images attached via the Image Module, no - it wouldn't know where to look for the images and so instead it depends on the image field set up in the Article content type. I think you could possibly get basic functionality, that would cycle through the images in whatever folder they're uploaded to - but the block would be unstyled and you'd loose the titles, subtitles and pager, which would defeat the purpose.

Thanks for the info. So I should switch from Image to Imagefield.

Will the Nodereference Image Helper module work with the Diver theme? Will the images show up with in the Dynamic Display Block and the story pages.

I don't know the answer to this one right off - I'll have to give it a whirl and get back to you.

I just have one more question about ddblock integration.
On the tutorial page (http://ddblock.myalbums.biz/node/975) I saw that you have to create a "Pager item text" and a "Slide text" field for the module to work. Now on a news site this could be very painful filling out extra fields that are only used by one module.

Can the diver theme use the teaser of the content to display the text in the ddblock or these extra fields are also needed.

The extra fields are actually required by the DDblock. If you only intend to tag some content for the features and ddblock, it might be worth while setting up an additional content type or using one of the core types to avoid having to add pager and subtitle text for every post.

Also, I've still yet to look at the Image Helper module, but it's on the agenda.

Here is the solution for the Image module: http://drupal.org/node/618224

How about that. I have to admit, my PHP skills aren't what they could be. That's a lot easier than I would have expected, thanks hansi.