"Reset to default size", "remove", "move up" and "move down" buttons should be a standard size when resizing frame.
Clicking "remove" when a picture element is selected removes the picture but not the element, which is only removed after the user clicks on another element.
Removing an item from the list (via the remove button) should automatically select the next on the list. (it seem to highlight the next item, but not select it).
the way "link to new note" / "link to existing note" works is not very obvious. It might be more clear if the user can select these options while no text is highlighted, (and it defaults to all the text in that text item), even if you have another note selected in the tree. this would be solved by using single clicks to navigate the tree.
"link to new note" always creates a new note with the selected note as the parent. (NOTE: I'm not sure if this can be changed, but might be worth looking at)
Remove button should be aligned (either left or right).
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Fixed the ImageElement to deactivate before the image is removed, thus being cleared in the cleanup() operation.
Removing an item from the list now leaves nothing in the list selected. I chose this because that is the default when navigating to a new Node.
As for the rest, some JLabels might be in order, like a "Selection:" label above the "Link to New Note"/"Link to Existing Note" buttons. Or, they could be done away with altogether and make it a right click operation. It will be easier to decide what will be best once we get some more controls to go in the lower-right panel.
As for the selected note always being the parent/sibling of the new note, I figured that would most often be the case of linking to new notes that the new note should be a child of the selected note. Perhaps a dropdown menu could be put in there that defaults to the selected Note, so that the user has a little more freedom, but the most common operation is still quick and easy.