I know this question has been asked before, but I can't find a clear solution. Here is my issue:

Master site is installed at:
/public_html/master

Slave site is installed at:
/public_html/master/multisites/slave

www.slave.com is mapped to:
/public_html/master/multisites/slave

In my multisites slave setup, I have my images folder set to:
/images/stories

On the front-end of www.slave.com, I can reference /images/stories/image.jpg perfectly fine.

In JCE, when selecting an image to insert into my article, it continues to reference:
/public_html/master/images/stories

How come it's not referencing my slave site images folder??

First you have to check that you effectivelly correctly mapped you slave.com to the miltisitess/slave directory.

Generally the problem comes from an error in the mapping directory that use the master instead of the specific slave directory.

If the directory is correctly specified in the hosting server, you can check it with a hello.txt or hello.php installed in this directory and that you access with www.slave.com/hello.php

If the hosting server is correctly defined, you can check that enter in the correct back-end website (slave).
Sometimes the definition of WWW and without WWW is not provided to JMS that result by a display of the master website administration. (I suppose this is not the case here).

You also have to check that all the JMS patches are correctly installed.

Still early days for me but another issue. I created a child site with independent media and template folders. And have uploaded images to stories/lakeside folder for using as a slide show with simple image gallery
{gallery}lakeside{/gallery}

The images are referenced to link but thumbnails are not displayed.
Same image inserted into article normally displays OK.

Is there a problem with Simple Image Gallery in JMS?
extensions.joomla.org/extensions/1468/details

If so can you recommend an alternative easy to use for clients thumbnail gallery solution.

I've tested simple image gallery using an image folder copied from the master site and it shows thumbnails fine - so problem is with folders created in the child site.

There is no problem know with Simple Image Gallery.

The key element that you have to check is that you have correctly assigned the hosting administration tool to use the slave site deploy directory as "document root".
If this is the case, check that the SIG folder that you are reading is correctly present in the slave site.
If you have installed the images in your master, check that you have shared (symbolic link) the images directory in the slave site. If you have decided to have a copy, JMS does not syncrhonize the files and folders. It just copy it when you create the slave site.

So all depends if you have correctly configured the HTTP server and its "document root" directory and if you have decided to share or have a specific copy of the "images" directory.

I'm confident that the the images folder is correct - I used the copy folder option not the symbolic link and independent media images in new articles can be inserted into . However, the Simple Image Gallery users forum is full of questions about thumbnails not being visible so the issue could be unrelated to JMS

Images from the same folder as the failed thumbnails can be used in the same article - and the lightbox opens to show full size image from empty thumbnail link.