What version of PHP is on the server and what version of PCRE? If it is PCRE version 8.21, there is a bug.. You will need to contact your host and have them downgrade to PCRE version 8.20 or upgrade to a later version.
Regarding the thumbnails... instead of seeing the thumbnail, you are getting a link? Check usergroup permissions and make sure they have permissions to view thumbnails.
edit: For some reason, I can't post the link to the bug. Remove spaces - bugs.exim.org/ show_bug.cgi? id=1187
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