1.4.1 on WinXP.
And yes, I've read the FAQ... jpegtran, convert, and jhead are all in the path on my host (Linux host, and I control the host). One interesting thing to note (and this is kinda hard to explain)...
I went into the folder where the images I had just uploaded were stored locally. I copied jpegtran.exe from GR to that folder. I then ran jpegtran with different rotate values (outputting to a new file to preserve the original file between runs) and got interesting results
First off, these photos were taken with a Canon S1 IS which DOES have a rotation sensor, and I have the option in GR to auto-rotate on, but it doesn't happen (I also have it on in Gallery too... is that the cause of the problem?)
Original image is <-, which was rotated in GR before upload 90 degrees clockwise. It appeared in Gallery <-.
-rotate 90 makes the resulting photo -> (!!!)
-rotate 180 makes the resulting photo V
-rotate 270 makes the resulting photo <- (!!! same as original photo)
So, the photo is somewhat rotated, but both Gallery AND Irfanview (my image viewer) seem to think it's still oriented normally, but when I run jpegtran on it it seems to rotate as if it were oriented ^.