Resizing images can be done in a thousand ways. The easiest way is dropping pixels. It's fast and ugly. This is generally what browsers do.
The best results are produced using resampling instead of resizing. It creates a new pixel in the thumbnail as a function of a range of pixels in the original image. After that you generally want to sharpen the thumbnail a bit.
The best resample algorithms are Lanczos3 and Mitchell. Those are generally not available in image editors like photoshop (at least not in 6.x) and paintshop pro who only offer bilinear and nearest neighbor. Not bad at all, but not the best you can get.
But enough said. Images say more than words. I took the liberty to borrow a boat picture from your forum and create a thumbnail with Arles' default setting. So you can compare Arles thumbnails with the one from your forum.
This is the thumbnail from your forum (size 3.23 KB).

This is the default thumbnail created by Arles (A one button click operation). It uses Lanczos3 with a sharpen filter (size 4.46 KB).

This is an alternative filter in Arles named Mitchell. Some people like this one a little better as the Lanczos sometimes borders on artifacts (size 4.15 KB).
Image quality is a subjective matter so it's probably best that everybody looks at the thumbnails themselves and decide what they like best. Some people won't even notice the difference.
Oh and here's an image with a watermark logo.
To do this I copied the logo from your site selected it in Arles and checked the watermark box. A two second job for the user, but hours of programming for me.
That's enough for todays trade secrets (and shameless self promotion)
[edit: added the watermark example; thumbnail sizes added]