Regenerate Thumbnails is a must have plugin for any dynamic website that deals with a lot of images, theme changes and expanded list of image sizes in use. Also, it should be part of any development environment, and for sure has saved me a lot of time in the past few months.
When you upload image in Media Library, WordPress will create resized versions of that image based on registered image sizes that include values from Media Settings and from anything registered by theme or plugins. But, if you make changes to these sizes down the road, that will not reflect to already resized images. This plugin will resize images for you according to new set image sizes.
There are 3 ways to do this. First one is to resize all images, and you will do that using newly added panel in Tools menu (image on the right). It will get all images, and resize each one, you will see the progress of the resizing. Also, plugin integrates into the Media Library and each image gets option for regenerating thumbnails. Bulk menu on Media Library also has this new option to perform resizing for selected images.
Plugin keeps all old thumbnails (they may be in use somewhere). But, I would prefer to have an option for this, because in development it would be useful to remove all images due to code changes. Beside that, only other feature I am missing from this plugin is scheduled resizing. But, considering that this operation will not be run very often, it is not really a big deal. Maybe it would be useful for some websites that have large number of images, but that in no way minimizes the usability and power of this plugin.
Regenerate Thumbnails is a free plugin created my Alex Mills, better known to WordPress community as Viper007Bond (or just Viper).