WordPress.org

A plugin which looks for <IMG> tags in the excerpt and, if found, wraps them with a link to the post permalink.

Helps with thumbnail images in the excerpt shown on the index page. There isn't any rocket science here - it's simply up to the post author to provide the image (and text) in the optional excerpt in WordPress' write a post form. However, the "trick" bit is to make that thumbnail image a hyper-link to the post. I've done this with this simple WordPress plug-in.