This plugin will scan your thumbnail-less posts and look for a suitable image to use as a thumbnail. 
It will look for images linked in the post content and will download and add them to the local library. 
Post scanning is performed only when <code>the_post_thumbnail</code> or <code>get_the_post_thumbnail</code> are called for 
that particular post.
So you designed your new thumbnail-based template, but you have tons of thumbnail-less posts and 
don’t want to spend too much time on scraping your old posts for a thumbnail picture. Maybe you 
think you will probably forget to set a thumbnail for your new posts. Maybe both, as was my case :).
When a thumbnail for a post is queried and nothing is found this plugin will scrape the post for 
an <code><img></code> tag and its <code>href</code> property. Once a suitabile image is found (based on the configured 
settings), it will be downloaded ad set as the post thumbnail. If no suitable image is found, 
a default one will be used.
This plugin is still in early development state. It just covers my needs (see the “To do” section 
for more details). It has been tested only with wordpress 3.0.1, but should work also with 2.9, 
since I used similar code with 2.9 (even if it was included in my template’s <code>functions.php</code>).
The plugin is not supported. This doesn’t mean that I will not look into submitted bugs. Anyway, 
don’t expect prompt answers, since this is done in my spare time.
<h3>To do</h3>
Many things should be done in future releases. Here are some:
<ul>
<li>Current version always downloads selected linked images. This works good with images hosted on external sites. 
If your posts link to images hosted in your media library, you will end up with two images.</li>
<li>A more user friendly name should be used for images added to the library (e.g. Thumbnail for post …)</li>
<li>Somewhere, a button to reset the “previously scanned” status of all posts should be provided (on current version, 
you cas set or reset it for single posts in the edit page.</li>
<li>“previously scanned” status should probably be reset (or at least you should be asked to) when publishing a 
updating an existing post</li>
</ul>
More ideas are wellcome.

Automatic Thumbnail Generator

Automated on-demand generation of posts thumbnails.

Mike Bijon

Get better uploaded quality or save bandwidth: Change the JPEG compression-level of uploaded images and thumbnails.
‘Resized Image Quality’ lets you easily change the compression-level of uploaded JPEG images and thumbnails. Set it for maximum quality when you want images to look their best, or take advantage of lower quality settings to save bandwidth.
The only interface is a slider aqdded to the Settings > Media admin page, making this easier to use than other compression plugins or functions.php settings.

WP Resized Image Quality

Get better uploaded quality or save bandwidth: Change the JPEG compression-level of uploaded images and thumbnails.

Automatic Thumbnail Generator vs WP Resized Image Quality