Images are saving as .tmp files instead of proper name

edit:moved this to its own issue
It seems the image is working when viewing the full page view somehow but in node/edit the file is named as such p16a6qjkfeelfatq1npv1tm7kda4.tmp and therefore cannot show as an image.

Here is the output of of that section on the node/edit page.

<div class="form-item form-type-item" id="edit-field-image">
  <label for="edit-field-image">Image </label>
<img alt="" src="http://mesite.dev/sites/mesite.dev/files/styles/medium/public/image-galleries/p16a6qqg6e1vev1pq0cbg1jvc1i6p3.tmp">
</div>

I found this unresolved issue... Images module, image_create_node_from() and tmp files seems to be exactly the same thing.
I will keep searching around and see what I can find, seems like it shouldn't be too hard to fix once we figure whats causing it.

Another effect of this is makes Views incapable of displaying the images... it doesnt like the .tmp extension.

Edit: Fixing the code above into tags ... also I tested this on the latest release and still have the strange .tmp file name issue... are you not seeing that in your tests?