OK, I renamed this feature simply as "more". As I went to extend it to quoted images, the current name started to seem silly. The old "fold" tag is still supported, but I may remove it at a later date.
Most quote images should now be hidden by default. There are some rather tricky problems with this due to the design of the parser and the way HighSlide glues itself into it. So for now, off site images that are wrapped with URL tags will not be hidden. I may revisit this down the road.
This change was tricky, so let me know what bugs you come across.