class.upload.php is a powerful and mature PHP class to manage uploaded files, and manipulate images in many ways. The script is available under a GPL license.
After more testing i've found out that the resizing works BUT it will not work on images that are more that 2,500px in either height or width, even if tho the files are under 200kb, any files below that will work find it's just files above that that will not work.
You are probably running out of memory. What is important is not the size in KB, but the image dimensions, as the picture gets deflated into memory, and each pixel takes space.
Any suggestions? Thanks!
See this post for more details.