Using SWF files as thumbnails
You can use SWF files as thumbnails instead of jpegs. The thumbNailer automatically makes every thumbnail a button, so if you have a button inside the SWF it will not work.
To create an SWF thumbnail that will act as a button, do the following in the thumbnail's fla:
1) Create button states on the main timeline (make 3 different keyframes and change the look of the button in each keyframe for events when the mouse is out of the button area (up), over the button (over) and clicking on the button (down)).
2) Add frame labels "_up", "_over" and "_down" for the corresponding keyframes.
3) Add a stop(); action in the first frame.
4) Export the SWF and it's ready to use!
You can download the source file for the button above here.
If you are interested in further explanation, please continue reading.
When the onRelease event is defined for any Movieclip, it behaves as a button. Even if you define an empty event like:
my_mc.onRelease = function() {}
You will get the hand cursor when rolling over my_mc. If you the define the _up, _over and _down labels in the main timeline of the movie, Flash will automatically move the playhead to the frames where these labels are. You don't need to define onRollOver, onRollOut etc as Flash will do this automatically.
If you specically need to have an onRelease action inside the swf thumbnails, simply add the action in the frame labeled _down and this will work as if the action was defined inside the on(release) event handler. There is no reason to add an invisible button, because the whole thumbnail clip IS a button.