Please make you have installed the Azonity AutoThumb plugin.
If you haven't, you can try to install it first, download the plugin here: http://www.mediafire.com/file/4t6j7df6381jqk8/azonity-autothumbnail.zip
Then install it as a plugin from Plugins -> Add New -> Upload.
After that visit Settings -> Azonity Autothumb menu, and click the "Generate Thumbnails" button.
(depends on your server/hosting, it may takes several seconds or minutes until all the thumnails are generated successfully)