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Making everything into a module just to allow a moderator to access it, is very short sighted indeed.
What really is required here is the ability for XOOPS to move forward from this and actually give the admin the ability to give users a moderator task area within the front end of XOOPS (if Admins feel uncomfortable giving users back end access, which of course moderators can do right now.)
Keeping the image manager as a system module would keep the development under the core developers and ensure the further development in the long run. We have seen to many times how modules soon become outdated and unusable.
I agree that image manger needs a massive update, there is so many things wrong with this area, I would basically scrap it and start again and without the need to save everything in the database. Waste of system resources imho.
I personally would have the ability to tie media to articles/content and if you delete the article it should delete the media too.
Plus media should be stored in categories if the admin should choose to do so and just not with the same folder (uploads).
All media should be viewable in the admin area, mp3s, images, swf etc and the ability to alter media config (streaming media) should be within the content admin. (I kinda liked the way that Joomla did this, but not quite the same way. Will explain more if required ).
Also, hooks should be made available so any part of the system or modules can have access to it.
Access rights should be applied to each folder and moderators should have moderation rights from the frontend as well as the backend.