Google Docs generates thumbnails for documents, so you can quickly preview files. For now, this feature is only available if you share a folder and use the special view for shared folders.
Google stores the thumbnails using Picasa Web Albums. Here's an example of thumbnail:
You can replace s32 with other values: s64, s640 to see bigger versions of the thumbnails. It's likely that Google Docs will add a grid view for managing files in a more traditional way.
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