Click and drag the thumbnail you want to use from the main Explore window to the Thumbnail box on the right.
ETA: And no matter what I do, I can't replicate the image removal you're reporting. You must be doing something that you're not telling us. Please provide more detail, like maybe some screen shots.
ETA2: Ah, I see. If you double-click the Thumbnail box, then navigate to the original image in your file system, and choose it, jAlbum excludes the chosen image (it doesn't delete it). This is the expected behavior - it's intended to let a user select an image to use for the thumbnail or the theme image, without having that image appear in the album.
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