sorry if this is really basic, but once I add videos to the project I can see a clear thumbnail under "project media", so I can instantly recognise it.

why isn't this possible under "explorer"? of all the different views I can select, none allows me to see what the first frame of the video looks like

Fed

Probably because with Explorer you are seeing the file location within Windows - nothing to do with Vegas.
If you went direct to the file location without running vegas, you still wouldn't see anything other than the windows icon for the file...

Mmm thats not correct. If I go into a folder on windows, I can select to see icons that show the first frame of the video, what I cannot seem to replicate in vegas

In that case, you're lucky, because I can't see any video frames in my folders - only icons or the list/details view...

It's just the way it works. It's just as easy just to use Windows Explorer, so I never bother with the Vegas Explorer window.

sure. I was just wondering why such a basic thing like expanding the icons so that you can see exactly the videos you are choosing for the timeline is not implemented

What version of Windows are you using?

Windows 7 will show a thumnail of most video formats: avi, wmv, m2t, m2ts, mpg, mp4 (Not sure about mov files).

Windows XP doesn't do thumnails of m2t and m2t (and mp4 I think).

I don't remember about VISTA, but I think it's closer to Windows 7.

You need to set the view to medium icons or larger.