In the {IMAGE} section there, change the code
Code:
{include file="product_thumbnail.tpl" productid=$f_products[product].productid product=$f_products[product].product}
to read
Code:
{include file="product_thumbnail.tpl" productid=$f_products[product].productid image_x=70 product=$f_products[product].product}
The difference is the addition of the
image_x=70. This send the x demention for the image to the tumbnail template. Basically telling it to display the image 70 pixels wide.
Also, as logic would follow, you can specify AND/OR the "y" cordinate... image_y=70..
Really it depends on what you want to control, the height (y) or the width (x) if the thumbnail. But I would chose only one... not both... or you will ultimately end up with some funky looking pictures