I used an image cropped from a page of my comic. I just picked something that looked dynamic and had two of my fave characters. I was planning on making new art and was just using this thumbnail as a place holder... but I never got around to it and people seemed to like it so I left it.
It was also fun to see people's reactions when I got to the page that I took the thumbnail from 
For the episode thumbnails I basically did the same thing, picking a panel from that chapter and adding a little frame with the episode number:
But to answer your question about the size, I always work larger and then scale down as a rule. It lets you put more detail and makes the lines look cleaner.