Hi Pete -- you want to make sure there are no spaces between the operator and the extension and you don't need a period, so: try type:jpg, and it should work!
well done DropBox and @rhut - these new search features has improved really made DropBox so much more useful for me!
i now don't have to use my Windows PC's operating system to search (which requires a full download of all data so the operating system can index it) - i know do powerful searching on my on DropBox via iPhone while on the run.