Not having width/height attributes defined inside the image shouldn't make a difference. The most likely obvious error would be that one of your references to the external parts of the script are broken:
Code:
<script type="text/javascript" src="http://ajax.googleapis.com/ajax/libs/jquery/1.3.2/jquery.min.js"></script>
<script type="text/javascript" src="jquery.magnifier.js">
/***********************************************
* jQuery Image Magnify- (c) Dynamic Drive DHTML code library (www.dynamicdrive.com)
* This notice MUST stay intact for legal use
* Visit Dynamic Drive at http://www.dynamicdrive.com/ for this script and 100s more
***********************************************/
</script>
Check both references above are correct (ie: not broken), especially to the file jquery.magnifier.js on your server.
Bookmarks