This is winding me up something rotton. I submitted this problem along with the "random reset when I'm watching a film even though I've told it not to auto update" problem.
On the picture thumbnail problem, I find that unless I wait for the thumbnail to come up then I get a "picture cannot be displayed" error, if I wait for the thumbnail to come up then it displays OK and it's fast changing between pictures (which have already had their thumbnails loaded. As I run out of thumbnailed images it gives me the error.
Both PS3 and NAS are up to date, firmware wise.
The support advice I got was to turn it off and on again (!) and to turn off auto updates (which I said were already off). When that didn't solve it, he suggested I send it back using the form on the website! Not really as simple as that as I've got about 1Tb of stuff on it!
I know my network is OK as it's happy streaming full 1080p video!
What's going on! I'm so close to sending it back but I'm guessing I'll just get one back with the same problem.
Before this I had an Iomega 500Gb Home media thingy that worked flawlessly, didn't need updating when I added stuff to it, instant thumbnails, streaming video. No hassle!
Come on Western Digital, please help.