The widget didn’t show up the first time I tried it either. My theme has a large functions.php file and I had to do some guessing to place the code:
if ( function_exists( 'add_theme_support' ) ) {
add_theme_support( 'post-thumbnails' );
}
somewhere that didn’t mess with any other functions. Ended up working when I put it as the second function in the list, directly after function the_slug() { ... }
Don’t know if this helps at all. Good luck!
OK, doing some more research, I believe the answer is YES, you can only use images that are hosted the same place as your wordpress site. As explained by Ronald van Weerd:
Since the WordPress images are physically resized (so not dynamically during page load), images on a remote server can’t be used.
Before WordPress implemented this feature in the core, timthumb was (and still is) a popular solution. It does resizing on the fly, and will save resized images in a local cache folder in your WordPress site.
