This week's book giveaway is in the OO, Patterns, UML and Refactoring forum. We're giving away four copies of Refactoring for Software Design Smells: Managing Technical Debt and have Girish Suryanarayana, Ganesh Samarthyam & Tushar Sharma on-line! See this thread for details.
I'd recommend you write an applet to do this. The only way to do it without an applet would be to actually upload the file, create a thumbnail image of it on the server, and then send the thumbnail back to the browser, which hardly sounds like an efficient way of doing things. An applet, on the other hand, runs on the local machine and can find the file and display a thumbnail of it without any round trips to the server.