I found Fedor's code here and implemented it into my project. The only difference is that my application does not have a list view, rather, I am accessing 1 image at a time from the server. When the activity launches, i call "DisplayImage(...)" to show the first picture. Then there are 2 buttons (previous/next) that when clicked, they call "DisplayImage(...)".
It works fine for a little while, but then I get an Out of Memory error. At the top of his code, he comments that you may want to use SoftReference. I am assuming that would fix my problem, right? I played around with it a bit but when I tried modifying it to use SoftReference, the images never load. I have never used SoftReference before so I figure I'm just missing something. How would I modify that code (ImageLoader) to fix my OOM error? Is there a better way of caching the pictures as you browse them?
UPDATE: Here is the code in case you don't want to view the other files in the source.
package com.fedorvlasov.lazylist;
import java.io.File;
import java.io.FileInputStream;
import java.io.FileNotFoundException;
import java.io.FileOutputStream;
import java.io.InputStream;
import java.io.OutputStream;
import java.net.URL;
import java.util.HashMap;
import java.util.Stack;
import android.app.Activity;
import android.content.Context;
import android.graphics.Bitmap;
import android.graphics.BitmapFactory;
import android.widget.ImageView;
public class ImageLoader {
    //the simplest in-memory cache implementation. This should be replaced with something like SoftReference or BitmapOptions.inPurgeable(since 1.6)
    private HashMap<String, Bitmap> cache=new HashMap<String, Bitmap>();
    private File cacheDir;
    public ImageLoader(Context context){
        //Make the background thead low priority. This way it will not affect the UI performance
        photoLoaderThread.setPriority(Thread.NORM_PRIORITY-1);
        //Find the dir to save cached images
        if (android.os.Environment.getExternalStorageState().equals(android.os.Environment.MEDIA_MOUNTED))
            cacheDir=new File(android.os.Environment.getExternalStorageDirectory(),"LazyList");
        else
            cacheDir=context.getCacheDir();
        if(!cacheDir.exists())
            cacheDir.mkdirs();
    }
    final int stub_id=R.drawable.stub;
    public void DisplayImage(String url, Activity activity, ImageView imageView)
    {
        if(cache.containsKey(url))
            imageView.setImageBitmap(cache.get(url));
        else
        {
            queuePhoto(url, activity, imageView);
            imageView.setImageResource(stub_id);
        }    
    }
    private void queuePhoto(String url, Activity activity, ImageView imageView)
    {
        //This ImageView may be used for other images before. So there may be some old tasks in the queue. We need to discard them. 
        photosQueue.Clean(imageView);
        PhotoToLoad p=new PhotoToLoad(url, imageView);
        synchronized(photosQueue.photosToLoad){
            photosQueue.photosToLoad.push(p);
            photosQueue.photosToLoad.notifyAll();
        }
        //start thread if it's not started yet
        if(photoLoaderThread.getState()==Thread.State.NEW)
            photoLoaderThread.start();
    }
    private Bitmap getBitmap(String url) 
    {
        //I identify images by hashcode. Not a perfect solution, good for the demo.
        String filename=String.valueOf(url.hashCode());
        File f=new File(cacheDir, filename);
        //from SD cache
        Bitmap b = decodeFile(f);
        if(b!=null)
            return b;
        //from web
        try {
            Bitmap bitmap=null;
            InputStream is=new URL(url).openStream();
            OutputStream os = new FileOutputStream(f);
            Utils.CopyStream(is, os);
            os.close();
            bitmap = decodeFile(f);
            return bitmap;
        } catch (Exception ex){
           ex.printStackTrace();
           return null;
        }
    }
    //decodes image and scales it to reduce memory consumption
    private Bitmap decodeFile(File f){
        try {
            //decode image size
            BitmapFactory.Options o = new BitmapFactory.Options();
            o.inJustDecodeBounds = true;
            BitmapFactory.decodeStream(new FileInputStream(f),null,o);
            //Find the correct scale value. It should be the power of 2.
            final int REQUIRED_SIZE=70;
            int width_tmp=o.outWidth, height_tmp=o.outHeight;
            int scale=1;
            while(true){
                if(width_tmp/2<REQUIRED_SIZE || height_tmp/2<REQUIRED_SIZE)
                    break;
                width_tmp/=2;
                height_tmp/=2;
                scale*=2;
            }
            //decode with inSampleSize
            BitmapFactory.Options o2 = new BitmapFactory.Options();
            o2.inSampleSize=scale;
            return BitmapFactory.decodeStream(new FileInputStream(f), null, o2);
        } catch (FileNotFoundException e) {}
        return null;
    }
    //Task for the queue
    private class PhotoToLoad
    {
        public String url;
        public ImageView imageView;
        public PhotoToLoad(String u, ImageView i){
            url=u; 
            imageView=i;
        }
    }
    PhotosQueue photosQueue=new PhotosQueue();
    public void stopThread()
    {
        photoLoaderThread.interrupt();
    }
    //stores list of photos to download
    class PhotosQueue
    {
        private Stack<PhotoToLoad> photosToLoad=new Stack<PhotoToLoad>();
        //removes all instances of this ImageView
        public void Clean(ImageView image)
        {
            for(int j=0 ;j<photosToLoad.size();){
                if(photosToLoad.get(j).imageView==image)
                    photosToLoad.remove(j);
                else
                    ++j;
            }
        }
    }
    class PhotosLoader extends Thread {
        public void run() {
            try {
                while(true)
                {
                    //thread waits until there are any images to load in the queue
                    if(photosQueue.photosToLoad.size()==0)
                        synchronized(photosQueue.photosToLoad){
                            photosQueue.photosToLoad.wait();
                        }
                    if(photosQueue.photosToLoad.size()!=0)
                    {
                        PhotoToLoad photoToLoad;
                        synchronized(photosQueue.photosToLoad){
                            photoToLoad=photosQueue.photosToLoad.pop();
                        }
                        Bitmap bmp=getBitmap(photoToLoad.url);
                        cache.put(photoToLoad.url, bmp);
                        Object tag=photoToLoad.imageView.getTag();
                        if(tag!=null && ((String)tag).equals(photoToLoad.url)){
                            BitmapDisplayer bd=new BitmapDisplayer(bmp, photoToLoad.imageView);
                            Activity a=(Activity)photoToLoad.imageView.getContext();
                            a.runOnUiThread(bd);
                        }
                    }
                    if(Thread.interrupted())
                        break;
                }
            } catch (InterruptedException e) {
                //allow thread to exit
            }
        }
    }
    PhotosLoader photoLoaderThread=new PhotosLoader();
    //Used to display bitmap in the UI thread
    class BitmapDisplayer implements Runnable
    {
        Bitmap bitmap;
        ImageView imageView;
        public BitmapDisplayer(Bitmap b, ImageView i){bitmap=b;imageView=i;}
        public void run()
        {
            if(bitmap!=null)
                imageView.setImageBitmap(bitmap);
            else
                imageView.setImageResource(stub_id);
        }
    }
    public void clearCache() {
        //clear memory cache
        cache.clear();
        //clear SD cache
        File[] files=cacheDir.listFiles();
        for(File f:files)
            f.delete();
    }
}
Here is the same class after I tried to implement SoftReference. I don't think I did it right because this does not display the picture on the screen after loading.
package com.mycompany.myapp;
import java.io.File;
import java.io.FileInputStream;
import java.io.FileNotFoundException;
import java.io.FileOutputStream;
import java.io.InputStream;
import java.io.OutputStream;
import java.lang.ref.SoftReference;
import java.net.URL;
import java.util.HashMap;
import java.util.Stack;
import android.app.Activity;
import android.content.Context;
import android.graphics.Bitmap;
import android.graphics.BitmapFactory;
import android.widget.ImageView;
public class ImageLoader {
    //the simplest in-memory cache implementation. This should be replaced with something like SoftReference or BitmapOptions.inPurgeable(since 1.6)
    private HashMap<String, SoftReference<Bitmap>> cache=new HashMap<String, SoftReference<Bitmap>>();
    private File cacheDir;
    public ImageLoader(Context context){
        //Make the background thread low priority. This way it will not affect the UI performance
        photoLoaderThread.setPriority(Thread.NORM_PRIORITY-1);
        //Find the dir to save cached images
        if (android.os.Environment.getExternalStorageState().equals(android.os.Environment.MEDIA_MOUNTED))
            cacheDir=new File(android.os.Environment.getExternalStorageDirectory(),"MyApp/Temp");
        else
            cacheDir=context.getCacheDir();
        if(!cacheDir.exists())
            cacheDir.mkdirs();
    }
    final int stub_id = R.drawable.loading;
    public void DisplayImage(String url, Activity activity, ImageView imageView)
    {
        if(cache.containsKey(url)){
            imageView.setImageBitmap(null);
            System.gc();
            imageView.setImageBitmap(cache.get(url).get());
        } else {
            queuePhoto(url, activity, imageView);
            imageView.setImageBitmap(null);
            System.gc();
            imageView.setImageResource(stub_id);
        }    
    }
    private void queuePhoto(String url, Activity activity, ImageView imageView)
    {
        //This ImageView may be used for other images before. So there may be some old tasks in the queue. We need to discard them. 
        photosQueue.Clean(imageView);
        PhotoToLoad p=new PhotoToLoad(url, imageView);
        synchronized(photosQueue.photosToLoad){
            photosQueue.photosToLoad.push(p);
            photosQueue.photosToLoad.notifyAll();
        }
        //start thread if it's not started yet
        if(photoLoaderThread.getState()==Thread.State.NEW)
            photoLoaderThread.start();
    }
    private SoftReference<Bitmap> getBitmap(String url) 
    {
        //I identify images by hashcode. Not a perfect solution, good for the demo.
        String filename=String.valueOf(url.hashCode());
        File f=new File(cacheDir, filename);
        //from SD cache
        SoftReference<Bitmap> b = decodeFile(f);
        if(b!=null)
            return b;
        //from web
        try {
            SoftReference<Bitmap> bitmap=null;
            InputStream is=new URL(url).openStream();
            OutputStream os = new FileOutputStream(f);
            Utils.CopyStream(is, os);
            os.close();
            bitmap = decodeFile(f);
            return bitmap;
        } catch (Exception ex){
           ex.printStackTrace();
           return null;
        }
    }
    //decodes image and scales it to reduce memory consumption
    private SoftReference<Bitmap> decodeFile(File f){
        try {
            //decode image size
            BitmapFactory.Options o = new BitmapFactory.Options();
            o.inJustDecodeBounds = true;
            BitmapFactory.decodeStream(new FileInputStream(f),null,o);
            //Find the correct scale value. It should be the power of 2.
            final int REQUIRED_SIZE=1024;
            int width_tmp=o.outWidth, height_tmp=o.outHeight;
            int scale=1;
            while(true){
                if(width_tmp/2<REQUIRED_SIZE || height_tmp/2<REQUIRED_SIZE)
                    break;
                width_tmp/=2;
                height_tmp/=2;
                scale*=2;
            }
            //decode with inSampleSize
            BitmapFactory.Options o2 = new BitmapFactory.Options();
            o2.inSampleSize=scale;
            return cache.get(BitmapFactory.decodeStream(new FileInputStream(f), null, o2));
        } catch (FileNotFoundException e) {}
        return null;
    }
    //Task for the queue
    private class PhotoToLoad
    {
        public String url;
        public ImageView imageView;
        public PhotoToLoad(String u, ImageView i){
            url=u; 
            imageView=i;
        }
    }
    PhotosQueue photosQueue=new PhotosQueue();
    public void stopThread()
    {
        photoLoaderThread.interrupt();
    }
    //stores list of photos to download
    class PhotosQueue
    {
        private Stack<PhotoToLoad> photosToLoad=new Stack<PhotoToLoad>();
        //removes all instances of this ImageView
        public void Clean(ImageView image)
        {
            for(int j=0 ;j<photosToLoad.size();){
                if(photosToLoad.get(j).imageView==image)
                    photosToLoad.remove(j);
                else
                    ++j;
            }
        }
    }
    class PhotosLoader extends Thread {
        public void run() {
            try {
                while(true)
                {
                    //thread waits until there are any images to load in the queue
                    if(photosQueue.photosToLoad.size()==0)
                        synchronized(photosQueue.photosToLoad){
                            photosQueue.photosToLoad.wait();
                        }
                    if(photosQueue.photosToLoad.size()!=0)
                    {
                        PhotoToLoad photoToLoad;
                        synchronized(photosQueue.photosToLoad){
                            photoToLoad=photosQueue.photosToLoad.pop();
                        }
                        SoftReference<Bitmap> bmp=getBitmap(photoToLoad.url);
                        cache.put(photoToLoad.url, bmp);
                        Object tag=photoToLoad.imageView.getTag();
                        if(tag!=null && ((String)tag).equals(photoToLoad.url)){
                            BitmapDisplayer bd=new BitmapDisplayer(bmp, photoToLoad.imageView);
                            Activity a=(Activity)photoToLoad.imageView.getContext();
                            a.runOnUiThread(bd);
                        }
                    }
                    if(Thread.interrupted())
                        break;
                }
            } catch (InterruptedException e) {
                //allow thread to exit
            }
        }
    }
    PhotosLoader photoLoaderThread=new PhotosLoader();
    //Used to display bitmap in the UI thread
    class BitmapDisplayer implements Runnable
    {
        SoftReference<Bitmap> bitmap;
        ImageView imageView;
        public BitmapDisplayer(SoftReference<Bitmap> bmp, ImageView i){bitmap=bmp;imageView=i;}
        public void run()
        {
            if(bitmap!=null){
                imageView.setImageBitmap(null);
                System.gc();
                imageView.setImageBitmap(bitmap.get());
            } else {
                imageView.setImageBitmap(null);
                System.gc();
                imageView.setImageResource(stub_id);
            }
        }
    }
    public void clearCache() {
        //clear memory cache
        cache.clear();
        //clear SD cache
        File[] files=cacheDir.listFiles();
        for(File f:files)
            f.delete();
    }
}
 
     
     
     
     
     
    