Missing thumbnail image for sites

I have added the module sites, and added a website to it, I selected a photos but all I get is the grey no image thumbnail, does the image have to be a certain size or format ? 

Any image can be uploaded to Sites module, you can try the functionality on http://demo.boonex.com.

I would suggest to check your hosting audit page for any problems:

Admin Panel > Tools > Hosting Tools > Audit & Permissions