Good gracious. Well, I've finally got my images working. Here's how, though I would recommend if you're not comfortable in sql, you should make backups first, or probably hire someone to do this for you.
My images are in the /media/1/ directory (any that weren't, I've just now moved there). So here's what I did:
UPDATE wp_posts SET post_content=replace(post_content,'<%image(','<img src="/media/1/');
UPDATE wp_posts SET post_content=replace(post_content,')%>','" />');
This next part got a bit hairy, because when I'd first started my blog, I uploaded lots of random sizes. But to get you started, here's how to replace images that were 300x300...
UPDATE wp_posts SET post_content=replace(post_content,'|300|300|','" width="300" height="300" title="');
And here's how to replace images that are 300x400...
UPDATE wp_posts SET post_content=replace(post_content,'|300|400|','" width="300" height="400" title="');
There might be a better way to do this, but this worked, once I got all my image sizes figured out ;-)
-Velda