Here is the last email to Himanshu with DevDemon support...
Ok I have found the problem from your side . You have not set
Caching driver disable but to work with Channel Images, you must set
it to the "FIle". Now I have set it to file and it working perfectly.
I have set dummy Channel , Field Group and Field to test on your
Your php.ini could be overridden somewhere.
Check Tools > Utilities > PHP Info to see if there are any local values that don't match your php.ini
If you're on Apache try looking for a .htaccess file in the EE root or in any Virtual Host configurations you may have.
Sorry found the answer here. https://stackoverflow.com/questions/24867361/problems-with-ampps even though it appears the extension is there apparently it is not and I had to check it off on the extensions page.
The ee() function in 2.6+ is just a shortcut to another function, get_instance(), which appears in ALL versions of EE.
$EE =& get_instance();
if ( ! $the_password = $EE->input->post('the_password') ) :
Seems like the issue lies with this add-on http://koivi.com/ee-matrix-cat-col which hasn't been updated for two years so is incompatible with EE2.7
Adding this (http://pastie.org/private/f3xjwmrrm97psclvuu3hq) to the third_party/matrix_cat_col.php class should help (right before the last "}").