Create youtube-last-video.php

place this in your loop and you get a thumbnail!\

http://img.youtube.com/vi/$vidKey/default.jpg
For the high quality version of the thumbnail use a url similar to this:

http://img.youtube.com/vi/$vidKey/hqdefault.jpg
There is also a medium quality version of the thumbnail, using a url similar to the HQ:

http://img.youtube.com/vi/$vidKey/mqdefault.jpg
For the maximum resolution version of the thumbnail use a url similar to this:

http://img.youtube.com/vi/$vidKey/maxresdefault.jpg