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Adding a drop shadow to a Rectangular Image

 
Let's start with a picture. For example this reduced-size screenshot of Dogwaffle in action.

Start Dogwaffle and select

File > Open

to open the image file. Note that in version 1.5 you can also open an image via capture from a TWAIN source (scanner, digital camera, webcam...)
After opening the image, select Control-C or the first option from the Brush menu:

Use selected as brush  (Ctrl-C)
 

Since the default selection is the entire canvas, it copies the entire image into the brush.

This means that you can use this newly defined brush to paint with.
Next, go to File > New and select a canvas which is larger than the size of the image. You will want to make it large enough so that there's plenty of room for the drop shadow margin and then a few pixels additionally.

After you've created the new canvas, it should appear in white. If not, use the Shift-k (K) command or the corresponding command from the Buffer menu to erase the canvas to the desired color. This may be white or something else if you will use the image against a different color in the background.

Notice that the custom brush which we defined earlier is still present: when you move the cursor over the new canvas you can see the outline of the brush.
Click the mouse button once briefly to paint one instance of the brush. The intent is to draw the brush image once exactly, without motion or smearing.
Note that the Opacity slider should be all the way at right. Otherwise it may be that the image will appear too faint. You want full opacity for this.
Now that the image is drawn against a larger backdrop of white, we will be able to drop a shadow from it onto the additional space around the image.

click on the Magic wand icon  for Alpha selection. It's the right-most on the second row of tools from the top.
Click on the white backdrop. The selected area will be the entire white backdrop, without the image. You will see the marching ants highlights around the image and along the canvas border.
Select "drop Shadow" from the Alpha menu, or right-click on the Magig Wand selector.

Select Alpha Options...
... and select Drop Shadow  from there.
When you select "Drop Shadow" you will see the dialog with options for the drop shadow.

Choose the desired shadow fuzziness and opacity. 

If you use this procedure for several images on a web page that should use the same type of shadow be sure to note the values and use the same throughout.
Click Apply and drop the shadow. 
 

It may look a bit like this now.
 
There is probably way too much white space left around the image and shadow by now. 

Let's select a subset region (rectangle) which will contain just a bit more than the picture and its shadow.

Use the Rectangle-to-Alpha selection icon for this.
Draw the rectangle region around the image and shadow.
Then use the Buffer menu and select "Crop to selection".

This will crop to the selection rectangle.
 
The new Canvas is now much smaller.
Use File > Save to save this as the final image.
 
That's it!