I've tried to find a technical description of what the Clear Image Cache does but have been unsuccessful. Does anyone know where that documentation might be?
Zenphoto is file system based which means its takes the folders and image within those folder within the root `albums` folder and makes them to albums. You upload your images there. Since Zenphoto needs thumbnails and sized images it generates cached version of those so that it does not need to do this every time again. Clearing the image cache means clearing this. This is necesary if you use watermarks that are added to these cached images.
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Here is a diagram how Zenphoto's image discovery works:
http://www.zenphoto.org/2009/03/troubleshooting-zenphoto/#22