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What image will be used as post thumbnail?

You can specify image number that will be used as post thumbnail. By default it takes the first image in the post body. If this image was uploaded on server plugin assigns it as a post thumbnail. If the image is externally hosted, plugin will upload it on server, attach to post and assign as thumbnail.

If there is no image for specified image number in the post, then no thumbnail will be stored for this post. If Overwrite parameter is checked, then if the post already has thumbnail old thumbnail will be removed.