There is a risk that the final line of the previous para will run at almost full measure, causing confusion whether the text below the image is part of the para or the start of a new one. To be on the safe side, ALWAYS indent new para’s after the first one (even though the aesthetics bother me, I have to admit — I prefer the look of the design on the left).

This question assumes that the first line after an image does, in fact, begin a new paragraph structurally. It's totally possible to have an image in the middle of a paragraph — or even a sentence, but that's a whole different type of situation that what you're talking about. Often, an image will simply be dropped in a layout at the most convenient place, not in a place that logically situates it within the flow of text. But even assuming that the images are conceived of as flowing in the same stream as the main text, I don't see why you couldn't have one in the middle of a paragraph. So the question is, I think, does it have to be consistent? I say no.

I run into this with block quotes. Sometimes they end a paragraph and sometimes they don't. So sometimes the paragraph afterwards is indented and sometimes it's not. It's an editorial decision, not a typographic one. (In this case, you can ask yourself, If the quote was just run in with the text like a short quote, would it end the paragraph or not?) The textual logic may be more important than visual consistency.

(And yes, when I'm the author, I always try to include quotes within a paragraph so as to avoid the unsightly indent …)

But unless you're the author, ask your author or editor what they think.

I'd indent, both for consistency and also because if a change later caused the text to reflow, the paragraph break could shift to a different spot and the lack of indent could be a problem.

With the indented paragraph style you're using, a non-indented paragraph isn't just stylistic -- it represents a section break. For example, the first paragraph of each chapter would not have an indent because they represent the beginning of a new section (even if there are other indicators, such as a title or a lowered text box). Mid-chapter section breaks would probably have a paragraph space followed by a non-indented paragraph (and sometimes a little bauble in the white space). Therefore, you should use the indent. At least that's how I was taught.

In general there's no need to indent as long as there's sufficient space between the caption and para to seperate them, then the eye automatically is drawn to the beginning body line.

Thanks for the feedback everybody.

It looks like the general consensus is to typically leave them indented; tmac, your comments echo my logical assumptions, which is reassuring. I've been fairly convinced of this for a while now—I'm usually one to follow technical rules over aesthetic options—but it came up in conversation the other day and I figured there no better place to put the matter to rest than here.

Type on! (That was a bad joke—my apologies.)