This is Bryan's patch from bug 30640 with a couple minor related changes, plus some unit tests.
This also addresses an issue with preventing too-big images from being scaled from r92279.
I also noticed that image magick's rotation support is broken in 6.3.7 (the version I had installed locally. I've since upgraded) I'm not sure if we should be doing something about that...
I did test this without both image magick, and gd (although only very briefly with gd) both seemed to work well. I didn't test any other image scalars.
Restructure and comment of ImageHandler::normaliseParams(). ImageHandler::normaliseParams() will now output both width/height as physicalWidth/Height, where width/height are the dimensions used by the browser, and physicalWidth/Height are the dimensions of the thumbnail that will be created. This allows keeping the use of unique dimensions for a specified thumbnail width, by forcing client side resizing of 1px-wide images with non corresponding height.
Also fixed a bug where the check for mustRender() was in an if statement where it should not have been.