I've managed to reproduce the issue on Win2k8R2. It's coming from ImageMagick not being installed/configured correctly.
These are the steps I took to fix the issue:
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Go out and install the latest version of ImageMagick
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After running the installer make sure that you close the command prompt from which you are running NodeBB.
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Open a new command prompt and rerun
node app.js
The problem should be fixed! 
