The ampersand is a bad idea (I put that file up many years ago without thinking and am now stuck with it), but is not the problem here. I should have mentioned that I've tried the same thing with other files with no odd characters, without success. For example
Redirect 301 /Apple.JPG http://www.iayork.com/Images/Old_Images/Apple.JPG
is ignored also. I also tried escaping the ampersand with no effect.
You have a wordpress blog on that domain. Does it have a .htaccess file in a different directory that could be conflicting?
There are other .htaccess files, but none "upstream" of the Images folder -- but I had thought that they should not interfere, anyway.
Another thought is a "weird" extra character in the .htaccess file from the way you put it on the server, but you said it works in one case, so that seems unlikely.
Right; again, I can redirect the directory as a whole, but not individual files.