Here's a quick tip that has helped me churn out custom thumbnails for my Youtube videos. In the past, I would get a picture of whatever I wanted to feature, then slog through a photo editor (Windows Paint or Gimp) to get it to the right size. YouTube wants your thumbnail to be 1280x720, so you have to finagle your graphic to get it to the right size. I'm probably just not doing it right, but it always took longer than I felt it should.
Now I use my video editor (Sony Vegas Pro 12) to do the very same thing. The difference now is that it's a much faster and simpler process. See the above video for a full explanation.