Took the plunge and deleted my WP multi-site install to correct some errors with my first install, namely getting domain mapping to work with unique domains.
All seemed okay until I did a restore (import) of this site and a few others and noticed there were no image thumbnails in the media gallery. Importing new images had the same issue and placing an image into a post resulted in no image being shown.
After much research and hair pulling I tried the WP Plugin Force Regenerate Thumbnails and it claimed to have regenerated the thumbnails but they still were not visible.
# uploaded files
RewriteRule ^([_0-9a-zA-Z-]+/)?files/(.+) wp-includes/ms-files.php?file=$2 [L]
I don’t fully understand what is does but it gave me back my images 🙂