> Testing folder name is "TP_Test", the custom images folder name is "images", and the custom thumbnails folder name is thumbnails"
When you choose the 'custom folders/URLs' option, you can't specify only folder names. You have to specify the URL names too.
In this case, your base folder may have been D:\TP_Test with image folder D:\TP_Test\Images and thumbnails folder D:\TP_Test\Thumbnails. The corresponding URLs to enter (relative to the TP_Test base folder) would then have been Images\ and Thumbnails\.
However I would strongly recommend that you just keep everything in one folder, which avoids any such problems and makes it much easier to put up (or remove) a web presentation for your client.
> Also, why are the JPG thumbnail names appended with"_jpg"?
When the original image is MYHORSE.PNG, the thumbnail name becomes MYHORSE_PNG.jpg (or tn_MYHORSE_PNG.jpg). So, it preserves the original file extension, which may be useful when your page includes MYHORSE.JPG, MYHORSE.GIF, MYHORSE.PNG and you wonder which thumbnail goes with which image.