This function was originally powered by WordPress 2.9, I thought that I include it here in case someone missed.
Many Style Magazine and news paper style WordPress themes using a thumbnail image on the homepage. Major themes used custom fields to get this done. From 2.9, WordPress allows you to upload an image and set it as the thumbnail post, only if the item being supported.
To enable this, add the following to the functions.php of your theme:
add_theme_support( 'post-thumbnails' );
The image uploaded as Featured Image can be called using:
<?php the_post_thumbnail(); ?>
Once you enable this, you can set the Featured Image or the Thumbnail image for the post using a widget (that will then appear) in the post editor right sidebar, below categories and post tags.
Source: For more details and options on Enabling Post Thumbnail Images, check here.
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