Auto Post Thumbnail PRO is a plugin to generate Featured Image (AKA Post Thumbnail) from first image in a post or any custom post type. The plugin will also create thumbnails from several popular Video services if it finds a Video embedded in the post.
Post Thumbnails is a theme feature introduced with Version 2.9 of Wordpress. It was quickly changed to Featured Images with Version 3.0. Post Thumbnail, now Featured Image, is an image that is chosen as the representative image for Posts. The display of this image is up to the theme. Most Modern themes now use featured images in a variety of ways.