In V4.4.5 the thumbnail behaviour is perfect, I think that Paul4 said it well on our V5 forum so I'll quote him.
I like automatic thumbnails of images in posts, but I see in this version to close a "clicked" image you have to move cursor to the image window and click an 'X', whereas in the previous version the image window was "on" your cursor and all it required was another click
I must say I much prefer the previous method of display, without the repositioned window and "greyed out" remainder, and certainly the method of opening/closing
So why the change? Any particular reason for it?
So did I.
we were using a library called 'HighSlide' which did everything we wanted and was great to work with. The problem with HighSlide is the licensing. Any commercial use requires a license to be paid. We have a lot of people making money from their sites that includes SP and I have to wonder how many of those paid for a license. Maybe not totally our responsibility but it was time to find an open source and GPL alternative.
WP standardises on jQuery and jQuery UI components and we prefer where possible to use those components for 100% compatibility. Hence the use of the jQuery UI Dialog from now on.