Creating Thumbnails

I read the news show pro manual and searched in this forum but I still don't get the basic idea: what do I have to do that the module creates a thumbnail? Which image is used by news show pro? Where must this image be placed? In the article? Where? How does news show "know" which image it should use?

All I know that php dg library is on the server and cache is 755.

Please, can anyone help?