Another answer that I haven't seen posted yet... Using Vista, not sure about Windows 7, etc. This one is admittedly more of a workaround than a fix.
I had mapped a network drive and when I accessed it using the mapped drive letter then I could not see the thumbnails. It would load them all but when the last one appeared they would all disappear. I tried everything listed here with no luck.
I could click a file and wait a few seconds until I saw the preview in the bottom left corner, but that would take forever for over 1,000 vacation pictures. If I highlighted multiple files, then I could get maybe 5 or so to go at once, but I had to wait.
I noticed that the cursor might start swirling and when it stopped it would be good, if there were multiple files then the address bar would have a green progress bar. When I refreshed, they would stay there.
Instead of accessing by the network drive letter, I used the UNC path (\IPaddress\sharename) to go into the folder. If I had it on medium or larger icons it would generate the previews, but this time the address bar would have the green progress bar
while generating the thumbnails. I noticed that the thumbnails would actually change size to slightly smaller. When it was done, the green progress bar would disappear and then I could refresh the mapped drive window of the same folder and the thumbnails
would all be there. A little bit tedious since I have multiple albums, but I can open the folder and just check back a couple minutes later and then do the next one, so its okay for now.