Here is the modified demo: http://danielm.herokuapp.com/demos/dnd/image-preview.php
The magic happens on onNewFile(id, file); our new file callback recives an HTML5 File object as parameter which can be used with the FileReader to accomplish our goal.
The code is very self explanatory:
onNewFile: function(id, file){
// Checks if this feature if availabe to the user
if (typeof FileReader !== "undefined"){
var reader = new FileReader();
// Our <img> object
var img = $('your-image-dom-object');
reader.onload = function (e) {
img.attr('src', e.target.result);
}
reader.readAsDataURL(file);
}
}
Modern browsers like Chrome/Firefox or IE10 support this feature; which is enough since those are also my uploader plugin requirements.