When an exercise is added to the exercises.xml like this:
<exercise>
  <title>title</title>
  <description>desc</description>
  <sequence duration="40"/>
</exercise>

This is also the case if an empty image is added:
  <sequence duration="40">
    <image/>
  </sequence>

Maybe some exercises don't have images (yet), but it should still be possible to add them.

workrave-crashlog.txt:
Crash log created on 11/08/2006 at 11:43:28.

version = 1.8.2
compile date = Jan 28 2006
compile time = 16:26:23
features = DISTRIBUTION EXERCISES GNET GNET2 GTK_MULTIHEAD 


code = c0000005
flags = 0
address = 586f5a
params = 2
C:\Program Files\Workrave\lib\Workrave.exe caused an Access Violation at location 00586f5a reading from location fffffffc

Registers:

eax=fffffff4 ebx=0022e9b4 ecx=0022e994 edx=fffffff4 esi=0022ea2c edi=00ce6ee0
eip=00586f5a esp=0022e97c ebp=0022e97c iopl=0         nv up ei ng nz ac pe cy
cs=001b  ss=0023  ds=0023  es=0023  fs=003b  gs=0000             efl=00210293

Stack trace:

PC        Frame     Ret
00586F5A  0022E97C  0058851E
0058851E  0022E9CC  004289B8
004289B8  0022EA48  00428B7B
00428B7B  0022EA54  00428905
00428905  0022EAB4  00428826
00428826  0022EAD4  00428018
00428018  0022EC14  00425D8A
00425D8A  0022EC4C  0041E1F9
0041E1F9  0022ECB0  00574FC0
00574FC0  0022ECBC  0057529E
0057529E  0022ECCC  0053E03E
0053E03E  0022ECEC  008B7A4A
008B7A4A  0022ED0C  008A34DE
008A34DE  0022ED4C  008B6CFF
008B6CFF  0022EF9C  008B5434
008B5434  0022F24C  008B5676
008B5676  0022F26C  00BBB092
00BBB092  0022F28C  00ADDF39
00ADDF39  0022F2AC  00ADD283
00ADD283  0022F2DC  00AD5832
00AD5832  0022F2FC  0044DA23
0044DA23  0022F32C  00ACDB51
00ACDB51  0022F35C  008A370B
008A370B  0022F38C  008A34DE
008A34DE  0022F3CC  008B6BBB
008B6BBB  0022F61C  008B5494
008B5494  0022F8CC  008B5676
008B5676  0022F8EC  00BBAFB5
00BBAFB5  0022F91C  00BBAC2F
00BBAC2F  0022F93C  00ACC40D
00ACC40D  0022F96C  00ACB3D3
00ACB3D3  0022F9AC  0090AF49
0090AF49  0022F9CC  00748267
00748267  0022FA0C  00748D60
00748D60  0022FA1C  00749007
00749007  0022FA4C  007494AA
007494AA  0022FA7C  00ACACFF
00ACACFF  0022FA9C  004687C7
004687C7  0022FAAC  00468606
00468606  0022FABC  00402D63
00402D63  0022FAE0  0041F05A
0041F05A  0022FAF4  0041F0B0
0041F0B0  0022FEF8  0055A96A
0055A96A  0022FF78  004011E7
004011E7  0022FFB0  00401258
00401258  0022FFC0  7C816D4F
7C816D4F  0022FFF0  00000000

Registry dump:

key = Software\Workrave

key = Software\Workrave\distribution
  value = port
  string data = 27273
  value = reconnect_attempts
  string data = 5
  value = reconnect_interval
  string data = 15

key = Software\Workrave\gui

key = Software\Workrave\gui\applet
  value = cycle_time
  string data = 10

key = Software\Workrave\gui\breaks

key = Software\Workrave\gui\breaks\daily_limit
  value = max_preludes
  string data = 3
  value = max_postpone
  string data = -1
  value = ignorable_break
  string data = 1
  value = enabled
  string data = 1
  value = exercises
  string data = 0

key = Software\Workrave\gui\breaks\micro_pause
  value = max_preludes
  string data = 3
  value = max_postpone
  string data = -1
  value = ignorable_break
  string data = 1
  value = enabled
  string data = 1
  value = exercises
  string data = 0

key = Software\Workrave\gui\breaks\rest_break
  value = max_preludes
  string data = 3
  value = max_postpone
  string data = -1
  value = ignorable_break
  string data = 1
  value = enabled
  string data = 1
  value = exercises
  string data = 3

key = Software\Workrave\gui\main_window
  value = x
  string data = 256
  value = y
  string data = 256
  value = head
  string data = 0
  value = cycle_time
  string data = 10

key = Software\Workrave\timers

key = Software\Workrave\timers\daily_limit
  value = limit
  string data = 14400
  value = auto_reset
  string data = 0
  value = reset_pred
  string data = day/4:00
  value = snooze
  string data = 1200
  value = activity_sensitive
  string data = 1

key = Software\Workrave\timers\micro_pause
  value = limit
  string data = 240
  value = auto_reset
  string data = 30
  value = reset_pred
  string data = 
  value = snooze
  string data = 150
  value = activity_sensitive
  string data = 1

key = Software\Workrave\timers\rest_break
  value = limit
  string data = 2700
  value = auto_reset
  string data = 360
  value = reset_pred
  string data = 
  value = snooze
  string data = 180
  value = activity_sensitive
  string data = 1

Known issue. I never bothered to fix it because this crash will never occur with default exercises. Fixed.