With all respect, the original TeX image conversion using (allowing) shell_exec() in php will not always work in a hosted web system.
This can become troublesome for the moodle users that using a external webhosting company for their moodle servers. Where you don't have the possibility to use LaTeX, mimeTeX or anything...
As a solution to this we created a filter that can use the Google chart API to render the TeX notation. Or if you rather would use a cgi-bin version
of the mimetex, that is also possible.
Just go to the settingspage and enter the url to the TeX renderer you would like. The Default TeX renderer is if you have a cgi version of mimetex in your cgi-bin folder. /cgi-bin/mimetex.cgi
This is just a extention to the default moodle 2.xx, TeX filter and will work with dragmath. So if you have problems with getting your moodle hosting company to do as you say, or want to reallocate som server load to google, try this out.
Download the filter from:
http://www.eakademin.se/wp-content/uploads/2011/05/flextex.zip
Read more at:
http://www.eakademin.se/verktyg/flextex-filter-for-moodle/ (in swedish)