download the latest copy of phpThumb from http://phpthumb.sourceforge.net and extract it into your vendors directory. Should end up like: /vendors/phpThumb/{files}.

Add this file into your components directory (/app/components/thumb.php).

Component Class:

<?php 
/**
 * Thumbnail Generator for CakePHP that uses phpThumb (http://phpthumb.sourceforge.net/)
 *
 * @package default
 * @author Nate Constant
 **/ 

class ThumbComponent{
    
    /**
     * The mime types that are allowed for images
     */
    var $allowed_mime_types = array('image/jpeg','image/pjpeg','image/gif','image/png');
    
    /**
     * File system location to save thumbnail to.  ** Must be writable by webserver 
     */
    var $image_location = 'images';
    
    /**
     * Array of errors
     */
    var $errors = array();
    
    /**
     * Default width if not set
     */
    var $width = 100;
    
    /**
     * Default height if not set
     */
    var $height = 100;
    
    /**
     * do we zoom crop the image?
     */
    var $zoom_crop = 0;//do not zoom crop
    
    /**
     * The original image uploaded
     * @access private
     */
    var $file;
    
    var $controller;
    var $model;
    
    function startup( &$controller ) {
      $this->controller = &$controller;
    }
    
    /**
     * This is the method that actually does the thumbnail generation by setting up 
     * the parameters and calling phpThumb
     *
     * @return bool Success?
     * @author Nate Constant
     **/
    function generateThumb($filename,$model){
        // Make sure we have the name of the uploaded file and that the Model is specified
        if(empty($filename) || !$this->controller->data[$model][$filename]){
            $this->addError('non-existant file'.$filename);
            return false;
        }
        // save the file to the object
        $this->file = $this->controller->data[$model][$filename];
        
        // verify that the size is greater than 0 ( emtpy file uploaded )
        if(!$this->file['size']){
            $this->addError('File Size is 0');
            return false;
        }
        
        // verify that our file is one of the valid mime types
        if(!in_array($this->file['type'],$this->allowed_mime_types)){
            $this->addError('Invalid File type: '.$this->file['type']);
            return false;
        }
        // verify that the filesystem is writable, if not add an error to the object
        // dont fail if not and let phpThumb try anyway
        if(!is_writable(WWW_ROOT.DS.$this->image_location)){
            $this->addError('directory: '.WWW_ROOT.DS.$this->image_location.' is not writable.');
        }
        
        // Load phpThumb
        vendor('phpThumb'.DS.'phpthumb.class');
        $phpThumb = new phpThumb();
        $phpThumb->setSourceFilename($this->file['tmp_name']);
        $phpThumb->setParameter('w',$this->width);
        $phpThumb->setParameter('h',$this->height);
        $phpThumb->setParameter('zc',$this->zoom_crop);
        if($phpThumb->generateThumbnail()){
            if(!$phpThumb->RenderToFile(WWW_ROOT.DS.$this->image_location.DS.$this->file['name'])){
                $this->addError('Could not render file to: '.$this->image_location.DS.$this->file['name']);
            }
        } else {
            $this->addError('could not generate thumbnail');
        }
        
        // if we have any errors, remove any thumbnail that was generated and return false
        if(count($this->errors)>0){
            if(file_exists(WWW_ROOT.DS.$this->image_location.DS.$this->file['name'])){
                unlink(WWW_ROOT.DS.$this->image_location.DS.$this->file['name']);
            }
            return false;
        } else return true;
            
    }
    
    function addError($msg){
        $this->errors[] = $msg;
    }
    
}
?>
And here's an example usage in your controller.

Controller Class:

<?php 
class ImagesController extends AppController
{
    var $name = 'Images';
    var $components = array('Thumb');
    var $uses = array('Image');

    
    function add(){
        if(!empty($this->data)){
            if($this->data['Image']['thumbnail']['size']){
                pr($this->data);
                if(!$this->Thumb->generateThumb('thumbnail','Image')){
                    pr($this->Thumb->errors);
                }            
            }
        }
    }
    
}
?>