diff --git a/imagekit/files.py b/imagekit/files.py
index ddfa4a8..c2ec36c 100644
--- a/imagekit/files.py
+++ b/imagekit/files.py
@@ -3,7 +3,7 @@ import os
 from django.db.models.fields.files import ImageFieldFile
 
 from .generators import SpecFileGenerator
-from .utils import SpecWrapper
+from .utils import SpecWrapper, suggest_extension
 
 
 class ImageSpecFile(ImageFieldFile):
@@ -44,7 +44,7 @@ class ImageSpecFile(ImageFieldFile):
         source_filename = self.source_file.name
         filepath, basename = os.path.split(source_filename)
         filename = os.path.splitext(basename)[0]
-        extension = self.generator.suggest_extension(source_filename)
+        extension = suggest_extension(source_filename, self.generator.format)
         new_name = '%s%s' % (filename, extension)
         cache_filename = ['cache', 'iktt'] + self.spec_id.split(':') + \
                 [filepath, new_name]
diff --git a/imagekit/templatetags/imagekit_tags.py b/imagekit/templatetags/imagekit_tags.py
index 0cb21ed..90a5584 100644
--- a/imagekit/templatetags/imagekit_tags.py
+++ b/imagekit/templatetags/imagekit_tags.py
@@ -1,5 +1,6 @@
 import os
 from django import template
+from django.utils.safestring import mark_safe
 
 from ..files import ImageSpecFile
 
@@ -40,42 +41,55 @@ class SpecRegistry(object):
 spec_registry = SpecRegistry()
 
 
+class ImageSpecFileHtmlWrapper(object):
+    def __init__(self, image_spec_file):
+        self._image_spec_file = image_spec_file
+
+    def __getattr__(self, name):
+        return getattr(self._image_spec_file, name)
+
+    def __unicode__(self):
+        return mark_safe(u'<img src="%s" />' % self.url)
+
+
 class SpecNode(template.Node):
-    def __init__(self, spec_id, source_image, variable_name):
+    def __init__(self, spec_id, source_image, variable_name=None):
         self.spec_id = spec_id
         self.source_image = source_image
         self.variable_name = variable_name
 
-    def _default_cache_to(self, instance, path, specname, extension):
-        """
-        Determines the filename to use for the transformed image. Can be
-        overridden on a per-spec basis by setting the cache_to property on
-        the spec.
-
-        """
-        filepath, basename = os.path.split(path)
-        filename = os.path.splitext(basename)[0]
-        new_name = '%s_%s%s' % (filename, specname, extension)
-        return os.path.join(os.path.join('cache', filepath), new_name)
-
     def render(self, context):
         from ..utils import autodiscover
         autodiscover()
         source_image = self.source_image.resolve(context)
-        variable_name = str(self.variable_name)
         spec_id = self.spec_id.resolve(context)
         spec = spec_registry.get_spec(spec_id)
         if callable(spec):
             spec = spec()
-        context[variable_name] = ImageSpecFile(spec, source_image, spec_id)
-        return ''
+        spec_file = ImageSpecFileHtmlWrapper(ImageSpecFile(spec, source_image, spec_id))
+        if self.variable_name is not None:
+            variable_name = str(self.variable_name)
+            context[variable_name] = spec_file
+            return ''
+
+        return spec_file
 
 
 #@register.tag
+# TODO: Should this be renamed to something like 'process'?
 def spec(parser, token):
     """
-    Creates an image based on the provided spec and source image and sets it
-    as a context variable:
+    Creates an image based on the provided spec and source image.
+
+    By default::
+
+        {% spec 'myapp:thumbnail', mymodel.profile_image %}
+
+    Generates an ``<img>``::
+
+        <img src="/cache/34d944f200dd794bf1e6a7f37849f72b.jpg" />
+
+    Storing it as a context variable allows more flexibility::
 
         {% spec 'myapp:thumbnail' mymodel.profile_image as th %}
         <img src="{{ th.url }}" width="{{ th.width }}" height="{{ th.height }}" />
@@ -83,12 +97,20 @@ def spec(parser, token):
     """
 
     args = token.split_contents()
+    arg_count = len(args)
 
-    if len(args) != 5 or args[3] != 'as':
-        raise TemplateSyntaxError('\'spec\' tags must be in the form "{% spec spec_id image as varname %}"')
+    if (arg_count < 3 or arg_count > 5
+        or (arg_count > 3 and arg_count < 5)
+        or (args == 5 and args[3] != 'as')):
+        raise template.TemplateSyntaxError('\'spec\' tags must be in the form'
+                                           ' "{% spec spec_id image %}" or'
+                                           ' "{% spec spec_id image'
+                                           ' as varname %}"')
 
-    return SpecNode(*[parser.compile_filter(arg) for arg in args[1:3] \
-            + [args[4]]])
+    spec_id = parser.compile_filter(args[1])
+    source_image = parser.compile_filter(args[2])
+    variable_name = arg_count > 3 and args[4] or None
+    return SpecNode(spec_id, source_image, variable_name)
 
 
 spec = spec_tag = register.tag(spec)