[eluser]jedd[/eluser]
Entirely agree with jacobc.
I just wrote a gallery system (web front end to plug into KPhotoAlbum), but not using CI. I tried gd2 and imagemagick functions, and for some things had to drop out to system() calls too. It was just infeasible, even on a very low traffic site (my own) and a reasonably powerful server (dual-core, 4GB) to call up relatively modest sized files (5MP and 7MP JPEGs) and convert them on the fly.
I ended up developing a very basic cache system and generated thumbnails, medium, and large images. Works a treat and wasn't especially difficult to construct. My cache management system is pretty easy, though, as I'm coming from a known collection of all available images (KPA uses an XML backend) and built a small admin function that will go through to check for stale cache files. But really, the thing flies compared what it was like doing it dynamically.
You should run a few benchmarks for resizing your images.