Hi Etain,
We actually have a utility that converts old image types in VIs to the newer image type- I actually just ran it on your VI and it worked nicely (new version attached)!
Go to C:\Program Files\National Instruments\Vision\Utility and you will see a VI called "Convert VI to use LabVIEW 7 Image Type". Run that and it will ask you if you want to run recursively, searching all subVIs. Select "YES" and you will be able to replace all the old with the new. Good Luck!
Dan
National Instruments