Finally, someone else realises that there's a nasty bug in Microsoft IE related to Adobe XMP as written by Photoshop 7. Steven Frank writes:

"Windows versions of Internet Explorer, mostly 5.5 and 6.0 get thoroughly confused by a file that identifies itself as .jpg but contains XML. When you try to load one of these inflated images with Win IE 5 or 6, it spins endlessly, trying to figure out what to do. From that point on, you have completely lost your ability to view images in that browser session. Even if you go to another site. All graphics loading will spin endlessly from that point on. Only completely quitting and relaunching Win IE fixes the problem."

Marc Pawliger from the Photoshop Team comments on this:

"Microsoft and Adobe worked together to identify the problems Windows Explorer had with JPEG files that contained application-specified data. This problem appeared not only for JPEG but TIFF files as well. The latest XP service pack fixes the known issues related to Windows Explorer and these files, include some bugs that can corrupt such files and make then unreadable at all if you use Windows Explorer to edit the metadata in the file.

Note this appears to be a different issue than the one you are reporting about Internet Explorer being unable to display such files."

Steven has a follow-up post, where he describes the ImageMagick '+profile' option. He suggests using '+profile iptc', we're using '+profile "*"'. Unfortunately, '+profile' requires a recent version of ImageMagick (so older servers require a software upgrade to be able to do the cleanup).

Update: Peder suggests using jpegtran to fix XMP-infected JPEG images, because it's fast and lossless. Simply run "jpegtran -copy none infected.jpg > clean.jpg". (jpegtran is part of the jpegsrc package which you can download at the Independent JPEG Group, or get it from jpegclub.org.)

Another update: Microsoft finally seems to be fixing this bug, there's a Knowledge Base article pointing to a "hotfix" for IE 6 SP1: "SYMPTOMS: When you use Internet Explorer 6 Service Pack 1 (SP1) to view a Web page that contains image files, you may experience the following behavior: Some of the images do not appear on the Web page. Internet Explorer may no longer display images until you restart the program. CAUSE: This problem may occur if you view a Web page that references an image that was saved from Adobe Photoshop 7.0 on Macintosh OS 10."

Update: Here's some more victims of the IE bug, and photo.net has a long-running thread on the issue.

Update [2006-10-11]: If you're running a recent ImageMagick 6 version, use '-strip' or '+profile xmp' instead of '+profile "*"'.