Yes, the progress screen then PM makes the JPEG from the NEF.
I did try this with a JPEG and as expected I di not have a progress screen, but it did not open th email client either.
I an running Outlook 2007 on both the Vista and XP machines.
As fo the error report, I tried to send it through the error dialog reporting module, but the PM email address associated with it was not deliverable - it was bounced back.