hi vicki, the way i do it (*if i'm not using ImageReady, that is...*) is to set my CROP measurement tool to the size i want my thumbnail to be (*i.e. 200px X 200px*) and crop my image to it, then do a "save-for-web" (*Ctrl+Shift+Alt+S*) and change my setting up-or-down to get the file size within range...

let me know if this helps of if you need more info..