The Dynamic Images module has been released, it's a free (basic) alternative to Telafirma's solution. I put this together since Telafirma has pretty much disappeared, and I kept having requests from customers to develop a solution.
This isn't an out-of-the-box replacement of all Telafirma's features in their Dynamic Image Generator mod, as their mod has a image resizing handled in pretty much any area of X-Cart possible, in addition to supporting Thickbox-style popups.
While Dynamic Images can easily do everything Telafirma's mod does (and more), someone will need to put in a bit of elbow grease to get to that point.
Read more about the module here (Third Party Addons forum):
http://forum.x-cart.com/showthread.php?t=41911
Here's a page using the module (note, the popup functionality is an implementation of Lytebox, which was implemented separately):
http://www.phpsitesolutions.com/x-cart-variant-addons/variant-chart-module.html