You have a couple options.
- Your handler can combine the images on the fly that it gets from the database and send the whole thing down to the browser.
OR (and I like this one better)
- You create the merged image at the time the images are uploaded to your site.
The second is better as the conversion only has to happen once and therefore means that you only have to spend those resources once. It does mean you are essentially storing 2 copies of the image, but that's fine.
UPDATE
I believe I misinterpreted what you were trying to do. I thought you were trying to combine the thumbnail with the full blown image. Instead, you appear to be really asking how to combine all of the thumbnail images.
In that case, it's even more of a bad idea. As David Dorward stated CSS is used to control layout. You're talking about content. However, the semantic issue aside, in the event you want to make tweaks to the layout your going to have to modify your code which creates the sprites to begin with. What if you decide to do 35 images? Or, change that to do 18?
By going the sprite route your pretty well screwed by being forced to modify code for any layout change which is NOT good style.
To cover that last question: wouldn't it be faster? Probably not. Under this scenario you would have to create the sprite on the fly, which introduces server overhead, which slows everything down. At most it might be a wash in the delivery time. At worst, you incur a large server and development performance negative impact.