5
The feature of resizing main photo only works under ImageMagick, NetPBM, or forced GD2.
Perhaps you don't have GD2 environment.
Thus I can't help you about resizing and the quality of thumnails.
The problem of uploading size will be solved only if class/uploader.php is replaced the file of XOOPS original core.
I can't support for hacked environment at all.
(myDownloads RC1 is one of "hack module" like IPBM, 4images ...)