Hello folks! I have now found a solution to the frustrating thumb nail problem! via One.Com's customer support:
They say this error occurs beuause there has been a change in the way they refer to the jpg support in PHP 5.3, and this can be resolved manually by changing the following lines in the gdim_class.pho in the Autogallery plugin:
/E107_plugins/autogallery/gdim_class.php Line 465 must be changed from:
$JPGSupport = $GDInfo['JPG Support'];
to: $JPGSupport = $GDInfo['JPEG Support'];
In my case it worked, and I now have thumbnails again without the Resize Error: (gd_open) Image type '2' not supported.
Pass it on to as many forums as possible, because this has really been a pain in the neck for me!