It seems that MoveableType doesn't recognize my favorite file format, .png. Fortunately, adding this capability is very simple.
I'm using NetPBM for image manipulation.
In mt/lib/MT/Image.pm, find the line:
my %Types = (jpg => 'jpeg', gif => 'gif');
and make it:
my %Types = (jpg => 'jpeg', gif => 'gif', png => 'png');
That's it!