PSD files are the native format used by Adobe Photoshop. There are various "flavors" of PSD files; ThumbsPlus can read most of them (as of Photoshop CS).
Version 3 and 4 Photoshop files are viewed and thumbnailed as they were last viewed in Photoshop. "Version 2.5 compatibility mode" must be set in Photoshop when saving the files (Photoshop's menu: File | Preferences | General | More). Setting compatibility mode does not eliminate the availability of any version 3 features, but makes the files somewhat larger (to accommodate the extra image information).
For later versions of Photoshop this option was renamed and moved:
Photoshop 5.5/6.0: Edit | Preferences | Saving Files - check Maximize backwards compatibility in Photoshop format.
Photoshop 7.0: Edit | Preferences | File Handling - check Always Maximize Compatibility for Photoshop (PSD) Files..
Photoshop CS: Edit | Preferences | File Handling - set "Maximize PSD File Compatibility" to Always OR Ask.