In order to get images to display, the database actually only contains a text path to where the image is located - usually the images folder. If the image is embedded in the database it won't work.Spooky has an excellent viewlet showing the steps to get the image to display.
http://www.outfront.net/spooky/adv_param.htm
To make a thumbnail link to a larger image, you might find this information helpful. It is how to make a detail page - and you can make your thumbnail a link to the detail page.
http://www.sitebuilder.ws/frontpage/tutorials/details_record.htm
Hope this helps a little.
Nancy
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