I don't think using PNG for the thumbnails would increase its size a lot.And even if it did, personally I would prefer it.
Why would you prefer it ?
JPG (at current quality) artifacts bother me a lot.
Adding an option to control JPG quality level would be fine too (I think ~50 is being used now).
This is indeed more a problem of compression level than compression format.
True. Any chance on getting an option to change the jpg quality level in the future?
No promise, but I'll probably take a look.
PNG would also allow for transparency, which would be my main argument pro-PNG.
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