Many Thanks Brink .. I'm gonna mark this one solved.
At least I now know it's working as it should.
But it makes no sense to me to show a Thumbnail for an Icon.
I thought an Icon was to show the associated program .. or other file/program info.
To add to my confusion .. I fired up Paint to grab my previous screen shots.
I didn't want to load my favorite programs just yet .. in case they were messing me up.
The Paint gif images show up as a Paint Icon and not an Image Thumbnail.
I fail to see the logic or any consistency.
I had a hunch my Avatar would be appropriate
I'm gonna blame this on a wetware problem