In five minutes of searching, I found this mention in a book that Windows 98 offered an option to use image thumbnails in Explorer. Cygnus originally filed their patent on June 12, 1998, but Windows 98 was already in beta at that point -- I was testing it at that time -- and by that time Microsoft probably had the feature implemented. And I wonder, where did Microsoft get the idea for the feature? Was it really a totally original idea, or did it have some earlier example it was following?
In the end, it's likely that this patent won't stand up to scrutiny. By deciding to go after three big and well-funded companies, Cygnus has almost guaranteed nothing but legal fees and empty coffers in this go-round. It's a shame that companies can exploit the patent system to prevent advances in software.