If anyone wants an easy to use GUI program for doing this rather than having to use command line tools, I'm currently making one (it will be free).

You can find more info (and a download link once it is complete) on my blog here: cjwdev.wordpress.com/.../ad-photo-edit-a-program-for-uploading-images-into-the-active-directory-thumbnailphoto-attribute-used-by-outlook-2010