Steve Eddins has developed MATLAB and image processing capabilities for MathWorks since 1993. He also coaches development teams on designing programming interfaces for engineers and scientists. Steve coauthored Digital Image Processing Using MATLAB.
I saw an interesting MATLAB based image processing application on a melanoma skin cancer blog recently. The example, including code, shows how the lesions are segmented, traced, and measured. Several Image Processing Toolbox functions are used. Here's a thumbnail version of a screen-shot from the blog: