featured posts slideshow, how to set post thumbnail?

Hi all this is my first post.

Im learning about WordPress 3.2.1 at the momment with a theme called NewsMore which can be seen here https://newwpthemes.com/wordpress-theme/newsmore/

This theme has a featured posts slideshow which does exactly what it says “Supposedly” The problem I’m having is with the instructions and implementing them.

Below are the instructions for how to use the featured posts category.

Last 5 posts form the selected categoey will be listed as featured in homepage.
The selected category should contain at last 2 posts with images.

How to add images to your featured posts slideshow?
? If you are using WordPress version 2.9 and above: Just set “Post Thumbnail” when adding new post for the posts in selected category above. Image sizes should be: Width: 500 px. Height: 280 px.

So i’ve got at least 5 posts in one category, but i dont know how to set post thumbnails, can anyone please help?

Oh just incase anyone asks to see the blog, it isnt live i’m playing about with it on a local setup.