Just perfect…But….

Great plugin…

However had over 2,500 images and the plugin would just hang without starting….

This did the trick, taken from here:
http://wordpress.org/support/topic/plugin-ajax-thumbnail-rebuild-error-500-solution?replies=4
On line 179 you can find:

$attachments =& get_children( array(
	'post_type' => 'attachment',
	'post_mime_type' => 'image',
	'numberposts' => -1,
	'post_status' => null,
	'post_parent' => null, // any parent
	'output' => 'object',
) );

Changing it to:

$attachments = $wpdb->get_results("SELECT id, post_title FROM {$wpdb->posts} WHERE post_type='attachment' AND post_mime_type LIKE 'image%'");