Regarding this issue, what browser are you using? The generating of thumbnails for the Import function is being called through AJAX, so if your javascript is not working, the thumbnails will not show up. If you import one of the images, is the thumbnail generated within the Manage tab or on the front-end gallery? Just trying to clarify where the issue lies.
I'm getting this too. I'm using Firefox 3.0.5 I'm able to import one image and view the thumb in the import area, but it takes a LONG time to view the one photo in the VIEW or MANAGE areas.
Is your webhost on a localhost or on a windows machine? I noticed that this happens with Firefox on my local WAMP installation (Windows XP). It works fine in Chrome or IE7 however, so it may just be an issue with Firefox not playing nice with a Windows server? I do not know why this hangs using FF and Win, but I'd like to do some more testing and gather more information from your installations as well.
Any of you others experiencing the same issue with a different combination or just with Firefox and a Windows server?