TimThumb, created and maintained by Tim McDaniels, Ben Gillbanks and Darren Hoyt, is a rather popular open source, image resizing PHP script, mostly used for generating thumbnails for blogging purposes on the fly. The script is fairly powerful, executes quickly and needs almost nothing from a developer in order to get it up and running on their own project.
The script makes use of the GD library to resize images based on the parameters used when calling the script. Thumbnails maintain aspect ratio and the script deals with jpg, gif and png files pretty well. It also has a caching system built in which helps keeps things fast.
In terms of parameters, the script allows you to set any of these for an image to be resized: