Hi Lee,
you can define your custom fields in the Admin mdoule in either the Page create/edit page or Post create/edit page. There is a section titled Custom Fields where you candefine your custom fields by giving them a name and a value. The name and value can later be used in your posts loop script as follows:
e.g. Custom Field Name: my-field
Custom Field Value: thumbnail.jpg
your code in the post Loop would be:
<div id="content" class="narrowcolumn" role="main">
<?php if (have_posts()) : ?>
<?php while (have_posts()) : the_post(); ?>
<div <?php post_class() ?> id="post-<?php the_ID(); ?>">
<div class="thumbnail">
<a href="<?php the_permalink() ?>" rel="bookmark" title="Permanent Link to <?php the_title_attribute(); ?>"><img src="<?php bloginfo('template_url') ?>/images/<?php echo get_post_meta($post->ID, 'my-field', true); ?>" width="200" height="200" alt="Post Image" /></a>
</div><!-- thumbnail ends -->
<div class="entry">
<h1 class="post-title"><a href="<?php the_permalink() ?>" rel="bookmark" title="Permanent Link to <?php the_title_attribute(); ?>"><?php the_title(); ?></a></h1>
<small class="post-info"><strong>Posted: </strong><?php the_time('F jS, Y') ?> in <?php the_category(', ') ?> by <?php the_author() ?></small>
<div class="post-desc">
<?php the_content('Read More') ?><span class="post-comments"><?php comments_popup_link('0 Comments', '1 Comment', '% Comments'); ?></span>
</div>
</div>
</div><!-- post ends -->
<?php endwhile; ?>
<div class="navigation">
<div class="alignleft"><?php next_posts_link('« Older Entries') ?></div>
<div class="alignright"><?php previous_posts_link('Newer Entries »') ?></div>
</div>
<?php else : ?>
<h2 class="center">Not Found</h2>
<p class="center">Sorry, but you are looking for something that isn't here.</p>
<?php get_search_form(); ?>
<?php endif; ?>
</div><!-- content ends -->
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