I have a fix ! it's not the best but if you only use the computer as a media center its fine.
1. Click on the Start button, then on All Programs, follow by Accessories.
2. Run Windows Explorer.
3. In Windows Explorer window, click on Organize button on the menu/shortcut bar.
4. In the drop down menu, click on Folder and Search Options.
5. Folder Options dialog window will appear. Click on View tab.
6. Under the Files and Folders tree heading, check (tick) the checkbox next to Always show icons, never thumbnails option.
7. Click the OK button.
Now the images will show in VMC but you will not get a thumb view of pictuers etc in windows but VMC will show all files correctly.
Now just need a way to show thumbs in widows for pictures