When I first got my phone on release day, I had a LOT of troubles relating to contacts, pictures, etc...
I discovered that it was because when I initialized the phone, I entered in my Yahoo, Google, and other email addresses, and the phone then linked those contact lists to my phone.
This caused me to have multiple contacts lists and images.
I unlinked all of those emails, and then I went to Google and turned off their Contacts List altogether. It is a horrible mess and interferes with your life. I hate invasion of Privacy.
Now, I only have the one large contact pix displayed on an incoming call and during the call duration.
The only place I see those little thumbnail views is in Favorites, or in the floating call display when that is enabled.