If your server has ImageMagick installed, the Image Wizard has a tab named "Thumbnail Image". That tab steps you through the process of creating a new (thumbnail) image out of the selected image, linking that thumbnail to the full sized image and inserting the thumbnail onto the page. If this is the first Thumbnail on the page you need to save the page to setup the scripts which will run the thumbnail link.
Depending on a variety of situations, a Thumbnail may not seem to work (turn on/off) until you exit the editor. That's due to the nature of wysiwyg behavior for absolute positioned elements (the full size image is absolute positioned). If you save a page when a Full Size Image is stuck in the display sequence it will remain displayed while in the editor - accessing the page outside of the editor will return it to hidden status.
If your server does not have ImageMagick installed, the Image Wizard will not contain the Thumbnail Image tab. You can however still Resize the image. This merely changes the with and height in the img tag and does not create a smaller (byte-wise) image for fast loading. Once that Resized image is on the page, you can then use the Inline Link tool's Inline Image Display tab to create a link that will display the image in Full Size.
has a tab named "Thumbnail Image". That tab steps you through the process of creating a new (thumbnail) image out of the selected image, linking that thumbnail to the full sized image and inserting the thumbnail onto the page. If this is the first Thumbnail on the page you need to save the page to setup the scripts which will run the thumbnail link.
tool's Inline Image Display tab to create a link that will display the image in Full Size.