KRS props
Liking YTtalk
I edit everything in Sony Vegas 10 Pro. It has a feature where you can convert any part of the timeline into a JPG image. That I load into my ancient Photoshop CS2 to produce a Thumbnail. I didn't start doing it until my 27th vlog and it just makes it look that much more appealing when embedded or as a suggestion.
I agree entirely, a good thumbnail can really help bring in views!