scriptygoddessSomeone at work sent me the link to this:
phpThumb()
Looks like an interesting way to handle thumbnail generations on the fly. As described on that page:
phpThumb() uses the GD library to create thumbnails from images (JPEG, PNG, GIF, BMP, etc) on the fly. The output size is configurable (can be larger or smaller than the source), and the source may be the entire image or only a portion of the original image. True color and resampling is used if GD v2.0+ is available, otherwise paletted-color and nearest-neighbour resizing is used.
(updated to add an additional link)
Poking around on del.icio.us, I also found this link for dynamic thumbnail generation:
Dynamic Thumbnailing with Imagemagick in PHP
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