From: thepurpleblob
Moodle uses external binaries to render the images which may need setting up for your system. The filter will first check for a LaTeX renderer (Ghostscript - is also required for this method) and failing that will use the simpler miktex + is also required for this method) and failing that will use the simpler mimetex binary included in the Moodle distribution. LaTex permits the whole range - of syntax, whereas miktex only supports a mathematical subset.
+ of syntax, whereas mimetex only supports a mathematical subset. +Ghostscript is available for Windows and there is a LaTeX implementation + called MikTeX available also.
The settings page allows the LaTeX and Ghostscript binary paths to be configured, along with the LaTeX preamble.
More info
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