You can now edit thumbnails on your latest uploaded videos.
The option to do so is under each video in the "My Videos" section located under the "My Account" drop down list. At the moment you have the ability to select from nine different frames. Once you press the still frame you like, scroll down and press "Select Thumbnail".
NOTE: You won't be able to select thumbnails for older videos at this time (prior to August 20th, 2013), but you can re-upload the older videos and then be able to select a thumbnail.