Alexander Mueting says that restarting his machine after installing PIL got it to work.
Someone found that he could open turkey.jpg, but not a jpeg file from his camera.
If you find you can open the image, and change it, but not show it, you could try writing the image to a file (use the im.save() method, for instance, "im.save('outFile.jpg')". ) Then when you are ready to hand in your program, go into the lab and make your program show the modified image using im.show(), which works on the machines in the lab.