Many WordPress themes today take advantage of the “Featured Image” functionality now available in WordPress. Themes that use  featured images will frequently aut0-resize and manipulate the featured images in a post to fit the design and layout of the theme.
For example on my theme, as the image below illustrates, the Featured Image is displayed in it’s full-size at the top, as well as automatically resized for thumbnails in the strip below the header. The Featured Image is also frequently displayed in a blog listing of posts and archives as well.
You can watch the video I created with Jing (from TechSmith) for this post. Hopefully it helps explain things for you.
If you have another question about WordPress or a piece of software you’d like to have illustrated for you through video, just let me know.