This forum provides a code=cpp tag which would wrap your code into a box and highlight it as C++ code, please make use of it.
The provided example seems quite similar to the
documentation example, so there's actually no reason why it shouldn't work...
On the other hand I strongly advice you to use SFML 2 and abandon SFML 1.6, since it has many bugs and there are already binaries for the SFML 2rc. It may also solve your mysterious problem.
SInce you're on Linux what graphics driver are you using and is it uptodate?
Would it be possible to share an image of the wrongly displayed sf::Image, because I've never had nor heard of such a problem and maybe I'm imagining something wrong.