I've found that this plugin has compatibility issues with wordpress 3.0 and has conflicts with the plugin Image Widget.
I deactivated Image Widget and the plugin started working a bit better.
One of the issues that I've encountered is that when I go to add a media file, if I've already tried to insert that file in the past, I'm no longer able to insert the image a second time. An example would be if I add a rich text widget to a sidebar, then insert a media file. I then delete that link and try to add it elsewhere, I'm no longer given the option to insert that particular file into the post. This could be a wordpress 3.0 issue, I'm not sure.