Hey TobinLam, one thing i do is to use ImageReady (PS's "sister app") to make my thumbs. i just click on the small icon at the bottom of PS's toolbar and "jump-to" ImageReady. the active file is then open and ready to go. IR seems to handle .JPG a lot better than PS and your file size should be fine...

let me know if you want help,
:)
retrocity