As far as I see, I find phpThumb() as the best of all PHP thumbnail image generator. It has lots of thumbnail generation features. You can create thumbnail in a number of ways with phpThumb().
phpThumb() uses the GD library to create thumbnails from images (JPEG, PNG, GIF, BMP, etc) on the fly. Basic functionality is available even if GD functions are not installed (as long as ImageMagick is installed).