I’m also experiencing this issue.
Further, the problem also affects images filtered by date.
WP version: 3.0.1
Plugin version: 3.1.6
We’re using the Image Widget for ad placement on NorthWest Book Lovers.
This occurs on our development servers and my local sever as well, so I’m reluctant to call it a WP problem.
Browsers: Firefox (latest stable), Chrome (latest stable), Internet Explorer 7. Ensured browser tabs were closed while testing.