If you wish to change the reference frame shown by iTunes in the Videos section of iTunes (and, possibly, on your brand new 5G iPod), just control-click (or right-click) any portion of the screen where the video is playing (be it the album art corner, or the dedicated video window), and choose "Set Poster Frame" from the pop-up menu. The currently displayed frame then becomes the standard iTunes thumbnail for that video!
You might want to pause the video in the right spot before doing this, but it also work on the fly.
[robg adds: Yes, this is a menu-item hint, but in a quick iChat survey this morning, not one person I asked knew about it (myself included), so I felt it was worth a mention.]

