Remove //@todo: swftools bug, can't enable this until they fix their pathing for the images.

Thumbnail code works when I enable the commented code
video_formatter.inc line 129

function theme_video_flv($video, $node) {
  if ($video->flash_player == 'swftools') {
    $options = array(
      'params' => array(
        'width' => $video->player_width,
        'height' => $video->player_height,
      ),
      'othervars' => array(
        'image' => $video->thumbnail->swfthumb,
        ),
    );
    $themed_output = swf($video->url, $options);
  }
...