[eluser]pickupman[/eluser]
[quote author="runrun" date="1309126221"]There is no ht.access in my application folder. Is it because I'm using CI 1.7.2 ?[/quote]
I would first strongly encourage upgrading to 2.0.2, as a lot of bugs have been fixed since 1.7+. It's also faster in many aspects, as it has dropped support for PHP4.
On your issue with the images, what does "doesn't work" mean? Are you getting an Apahce prohibited error, an Apache 404, CI 404?
Your /.htaccess file shows it checking if file really exists before sending the URI request to index.php, so it looks like you are good there.