Consult your image editing program's help file for more details. When I try to upload my site, all my images are X's. You've forgotten to upload the graphic files. You've incorrectly linked to the images. If your file is called CaT.JpG, you cannot type cat.jpg, you must type CaT.JpG exactly in the src.
Thumbnails are very useful, but they take a little bit of time to make.
Also, you will generally want to link to the larger graphic when you are done. Determine the ratio the thumbnail to be. Once you are satisfied with the thumbnail, think of a name for the image. Choose Save As and enter that name. If you wish, you can link to the larger image around the image.