I know there are controls out there that accomplish this same task, but I couldn't help but roll my own just to say "I did it." This example shows how to dynamically create thumbnail images using the System.Drawing namespace in .NET, and how to use those thumbnails in a repeater control.
The default.aspx Page
The first step is setting up the page that will display the images. I am using a DataList control for the binding. Notice that the ImageUrl property of the asp:Image control is forming a concatenated string that looks like "MakeThumbNail.aspx?file=mypic.jpg".
The default.aspx.cs Code-Behind
The MakeThumbNail.aspx Page