How do I generate a thumbnail using FileAPI (Firefox 3.6+)

Question

I'm looking for an elegant way to generate a thumbnail for use with the FileAPI. Currently I get a DataURL representing an image. Problem is, if the image is very large, than moving it around and rerendering it becomes CPU intensive. I can see 2 options to get around this.

• Generate a thumbnail on the client
• Generate a thumbnail on the server, send the thumbnail back to the client (AJAX).

With HTML5 we have a canvas element? Does anyone know how to use it to generate thumbnails from pictures? They don't have to be perfect -- sampling quality is acceptable. Is there a jQuery plugin that will do this for me? Are there any other way to speed up the clientside use of large images?

I'm using HTML5, and Firefox 3.6+: there is no need to support anything other than Firefox 3.6+, please don't provide suggestions for IE 6.0