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I don't understand the problem with the thumbnails; seems to work fine for me.

I can view a PSD as a thumbnail in explorer, I can see thumbnails when I open a file in CS and I can see them in the Image Browser. No problems here. And why do you need these thumbnails if you have the improved File Browser?  [confused]

My impression is that most users don't know how to use thumbnails in explorer, so let me explain two things.

First of all, to make thumbnails visible you need to select the thumbnail view in explorer (see left image).

Secondly, if you want to this view for all folders then go to:

Tools/Folder options, click on tab named "view"  and select apply to all folders.

Yes, for some reason copy/paste from Illustrator CS doesn't seem to work anymore. I haven't even found a solution to get an Illustrator CS path in Photoshop CS at all!  [doh]