Generate thumbs by visiting a URL such as your.com/thumbs/images/image.50x50.jpg. This will create a 50x50px thumbnail of your.com/images/image.jpg. The thumb will be stored on your server at your.com/thumbs/images/image.50x50.jpg so the next request for the same image will be loaded without loading php for ultra fast image cache.
The phpThumb tool lets you dynamically resize an image and, if one does not exist for it, make a thumbnail that's output and cached. From then on the script just pulls from that local copy. He includes his code to get it working and the mod_rewrite rule that maps an image request back to it (so it's still "/images/myimage.jpg" instead of "/app/phpThumb.php?src=myimage.jpg&w=100&h=100" in the img src).