I've been using websnapr.com for the web app I'm working on. It seems to be the best web-based solution around, but it does have some drawbacks, like thumbnails for new sites take some time after they've been requested before they're available. The "unavailable" thumbnail that they show in the mean time is a bit obtrusive too.

I think I'll be looking through the links in this thread to see if any of them are a better alternative. There's definitely room for a web service to do a better job at this, and it probably wouldn't be too hard with these utilities in the backend. It could even let you choose which one to render with...