I have a strange graphics loading problem which I can't explain. I have this simple file docs/paper.tex


In the same directory as docs/paper.tex I have a file called docs/teapot.png. In my project root directory I call pdflatex:

$ /usr/bin/pdflatex docs/paper.tex

It works fine. However, if I call latex:

$ /usr/bin/latex docs/paper.tex
! LaTeX Error: File `teapot' not found.

See the LaTeX manual or LaTeX Companion for explanation.
Type  H <return>  for immediate help.

l.656   \includegraphics[scale=0.40]{teapot}

Why does pdflatex and latex work differently here? And what is the right way to do it?

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