I am using Nemo on Unity. Nemo is not generating thumbnails in 12.04 but Nautilus does it so well. Why can't Nemo do itself independently?
In case there's still anyone using nemo on Ubuntu 12.04 (or Linux Mint 13) I've encountered the same issue.
The problem is explained here and seems to be a bug in this particular version of nemo.
As a temporary solution, you can remove the ~/.thumbnails directory and replace it with a symlink to ~/.cache/thumbnails
To do this, run the following 2 commands in the terminal:
Some in the linked post above have reported side effects like compounding thumbnails in the ~/.cache/thumbnails directory due to the symlink, but I haven't had any issue. My guess is they were switching between using both nemo and nautilus which wrote to both directories.