Do not buy this mod!! There is a better, free solution.
We purchased this mod from Stephen just before he disappeared. His irritating copy protection was preventing us from putting the site live, much to our client's annoyance. After two weeks of emails and phone calls (got his phone number via whois and Google), we gave up. We then had the task of solving this problem ourselves.
Because we had his partially functional module, we kept his admin interface. This could also be rewritten from scratch or even hardcoded but because of time constraints, we just went with what we had. We also had to make some minor changes to the templates, passing in relative image paths.
Replacing function.thumb.php was the main concern. As a closed-source document, we weren't quite sure what it did or how it worked. Some searching turned up what is probably the document that Stephen modified and encrypted. It is a smarty plugin, but since X-Cart is built on smarty it integrated perfectly:
http://sourceforge.net/projects/thumb-imp/
Check out the parameters in the source document. It has a lot of features that Couch's module doesn't have, though it is missing other features, ones that we simply didn't want. The main thing, the important thing, is that it generates thumbnails on the fly and caches the images.