Converting from NEF to JPG on the fly, with a reduction in dimensions, would likely take less time than serving the original image over HTTP. I'm betting it can be converted and the smaller image served faster than serving only the original.
But, I don't need anything that complicated. Even if the program can simply extract the JPG thumbnail from within the NEF that should be fine for my purposes.
I don't want to do a batch conversion because I don't actually want duplicate JPEG images. I want to use this solution to back up all my originals, which, from now on will be exclusively NEF.
Over the past year I've been shooting JPG+RAW and I'm now about to turn off the JPG option as it's really served no purpose. To give people copies of the images I can easily do an export out from Lightroom. I never let anyone else handle nor access my memory cards directly, so its not like I'd be handing them immediate jpeg images anyway.
UPDATE: Installing
Zenphoto on a sub-domain as a test.