Howard, I did this 4x in a row. I created a subdirectory named 'paw_photos' under the '~/Documents/genealogy' directory where I keep my .paw file. I then manually added a photo to that subdirectory. Then found a person, opened the wallet, and selected that same photo. I then closed the wallet. When the program asked me if I wanted to save the wallet, I clicked yes. That's when it crashes. I tried this using both .png and .jpg photos thinking that maybe the program wasn't set to handle .png images. That's apparently not the problem.
Here's a snippet from the crash window. Thought you might need some of this.
Process: PAW2U [28835]
Path: /Applications/PAW2X/PAW2U.app/Contents/MacOS/PAW2U
Identifier: net.lanopalera.PAW2U
Version: 99 (99)
Code Type: X86 (Native)
Parent Process: launchd [546]
Date/Time: 2011-08-21 09:49:17.695 -0400
OS Version: Mac OS X 10.6.8 (10K549)
Report Version: 6
Interval Since Last Report: 378402 sec
Crashes Since Last Report: 3
Per-App Interval Since Last Report: 694 sec
Per-App Crashes Since Last Report: 2
Exception Type: EXC_BAD_ACCESS (SIGBUS)
Exception Codes: KERN_PROTECTION_FAILURE at 0x00000000000000b1
Crashed Thread: 0 Dispatch queue: com.apple.main-thread
Jim