Where did her thumbnails go?

My former boss called me yesterday. She had downloaded some pics from a compact flash card to her My Pictures folder via a card reader. After doing this, all her thumbnails, including previously stored photos, turned to a picture of a sailboat at sunset. And, she claims, would no longer open when double-clicked. That is, I think they wouldn't open with the default program, which was Microsoft Fax and Picture Viewer. I had her choose Open with ... Paint and she was able to open them in Paint, so she knew they were still there. she had already restarted the computer before calling me. We tried in the My Pictures folder going to Tools, Folder Options, File types and checking the associations for JPGs (which she said these were.) They were associated with the MS Fax and Picture Viewer, which was what she wanted. About that time she had to leave work - and things were working the same as when she called me. Today when she went back in, the pics were once again opening with the default program. But the thumbnails are still the boat at sunset. Does this ring a bell with anyone? When I'm in My Pictures I can right click and one of the choices is Refresh Thumbnails. She doesn't have that option. (She has XP - I'm not sure which version, but I might guess Home).

Has anyone else encountered this?