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I am now using OG 5.0.1 and what I have noticed is there is a bug in the 'set image' control. If you first use choose 'set image', and then choose an image file with the 'include image in document' radio button checked, subsequent attempts at inserting a linked image fail. Instead the image is embedded in your document, regardless of which radio button is chosen. The work around seems to be to quit, re-launch, open your document, and be sure never to choose the 'Include image in document' button.

It seems to work well for me now with png's. They all update correctly. Don't know about pdf's.

Hope that helps,

Andrew