WordPress 2.9 among other things offer built-in support for post-thumbnails. Although it is available, there are two things to change to the theme.

Add the following line to the functions.php file.

if ( function_exists( 'add_theme_support' ) )
add_theme_support( 'post-thumbnails' );

In many cases, the index.php file will contain the loop. Add the following

if (function_exists('the_post_thumbnail')) the_post_thumbnail(array(100,100))

A great reference: wpengineer.com and ulyssesonline.com