Rebecca, our genius Web Project Manager at illuminea, did a search and discovered on the WordPress Codex that a bunch of new styles are needed in your style.php file in order to get the images to do what you want from WordPress version 2.5 and up. If you are using an older theme, you may not have these styles in your style sheet. The same classes are used to align images that have a caption (as of WordPress 2.6).

Here are the styles – you can just copy and paste them into your style.css file or wherever your CSS styles are located:

.aligncenter,
div.aligncenter {
   display: block;
   margin-left: auto;
   margin-right: auto;
}

.alignleft {
   float: left;
}

.alignright {
   float: right;
}

.wp-caption {
   border: 1px solid #ddd;
   text-align: center;
   background-color: #f3f3f3;
   padding-top: 4px;
   margin: 10px;
   /* optional rounded corners for browsers that support it */
   -moz-border-radius: 3px;
   -khtml-border-radius: 3px;
   -webkit-border-radius: 3px;
   border-radius: 3px;
}

.wp-caption img {
   margin: 0;
   padding: 0;
   border: 0 none;
}

.wp-caption p.wp-caption-text {
   font-size: 11px;
   line-height: 17px;
   padding: 0 4px 5px;
   margin: 0;
}