After toying around with content.xml I get the impression that images in a subfolder of "Pictures" are not supported. The resulting odt, however, contains the second image in "Pictures/fig/img.png"

Dear Liob,

You may kindly try the following modified version of your test document:

%---------------> start <------------------

\documentclass[12pt,a4paper]{article}
\usepackage[utf8]{inputenc}
\usepackage{graphicx}
\usepackage{blindtext}
%\DeclareGraphicsExtensions{.png}
\begin{document}

\makeatletter
\catcode`\:=11
\Configure{graphics*}
{eps}
{\xdef\svg:width{\the\Gin@req@width}%
\xdef\svg:height{\the\Gin@req@height}%
\Picture[pict]{\csname Gin@base\endcsname.png
width="\expandafter\the\csname Gin@req@width\endcsname"
height="\expandafter\the\csname Gin@req@height\endcsname"
}%
}

\Configure{IMG}
{\ht:special{t4ht>\PictureFile.4og}%
\ht:special{t4ht*>}%
\ht:special{t4ht<\PictureFile.4og}%
\OOmanifest{<manifest:file-entry
manifest:full-path="Pictures/\PictureFile"/>\Hnewline
}%
%
\ht:special{t4ht=<draw:frame
draw:name="\PictureFile"
text:anchor-type="as-char"
svg:width="\svg:width"
svg:height="\svg:height"
draw:z-index="0"
>%
<draw:image\Hnewline
xlink:href="Pictures/}}
{\ht:special{t4ht=" \Hnewline
xlink:type="simple"
xlink:show="embed"
xlink:actuate="onLoad"
/><!--draw:name="}}
{" }
{\ht:special{t4ht=" }}
{\ht:special{t4ht=--></draw:frame>}}

\catcode`\:=12
\makeatother

\blindtext

\includegraphics[width=3in,keepaspectratio=true]{img}
\end{document}

%---------------> end <------------------

You need to keep an eps version of the graphic (apart from your preferred graphic format) since TeX4ht makes use of only dvips driver and cannot get bounding box of other graphic file formats.

I have copied the output, test.odt for your checking. Hope this helps.

Radhakrishnan

(file #137)