w3 says tabular data, which to me says rows and columns, and thumbnails are generally placed in rows and columns, so I would say it's appropriate. The only thing missing is relations within rows or columns. They still maintain a nice order and there's no need to do any nesting.
However, I do like the floated lists that vladdy put together. I just started completely rewriting my personal site in xhtml 1.0, to replace my previous work that probably wouldn't have validated in html 3.2 (I don't have the heart to try). I was simply planning on tables to display my images, but I'll have to look at the code in depth to see if vladdy's actually ends up being simpler. That one picture sure gets old fast, though. :p