MoneyWorks currently stores 2 types of images. Transaction images and product images.
These go in a subfolder of Custom Plugins called "Pictures for NAME", where NAME is the company name from the company details dialog box. If you change the company name, MoneyWorks will rename the folder to match. If you duplicate a document, it will be able to "see" the same pictures because the company name will still be the same. (Beware, however, of changing the company name in the duplicate because that would effectively disconnect the pictures folder from the original file). This Pictures folder contains a "Products" folder and a "Transactions" folder.
Product images in the products folder are named PRODCODE.ext. The extension will indicate the type of image. It will generally be .png or .jpg or .pdf. As of v7, special characters such as * / < > | are hexencoded as @xx since these characers are illegal in filenames on Windows. On a Mac, if there are existing product images with, e.g. a / in the name, these will need to be manually renamed (replace the / with @2f).
Transaction Images are named SEQNUM.ext where SEQNUM is the (decimal) sequence number of the transaction.
On a network, the Pictures folder resides only on the server; it is not downloaded to clients (they get individual images on demand).
There is some concern that large numbers of files in one folder can cause problems for the OS (possibly on the order of 20,000-30,000) or more. In my (admittedly cursory) testing, I did not find any such problem (IIRC I looked at folders on Mac OS X with 50,000-odd files). I got some feedback from the filesystem team at Apple which suggested that there are no hard limits in HFS+ or NTFS but FAT32 on Windows may have some problems.