Thank you very much for replying to this thread gentleman! Although my issue persists.

TechMassey, I Greatly Appreciate your detailed information, I didn't even think about the default user reg hive coming into play. But can you please expound on this section as I didn't find any group policy or visual effects in this hive as outlined, do you know specific key names by chance? When I loaded the default hive I only found two keys as listed below that had to do with thumbnails, I disabled them to 00000000 but still the issue persists:

[HKey_Users\temp\SoftwareMicrosoft\Windows\CurrentVersion\Policies\Explorer]  "NoThumbnailCache"=dword:00000001

[HKey_Users\temp\Software\Policies\Microsoft\Windows\Explorer]  "DisableThumbsDBOnNetworkFolders"=dword:00000001

The key causing me the grief is the DisableThumbnails found in [HKLM\Software\Microsoft\Windows\CurrentVersion\Policies\Explorer], it keeps getting enabled with new users and this particular key can't be found in the default user hive so I'm missing something. When logged in if I disable this key I'm able to see the 'Always show icons, never thumbnails' option under Windows Explorer Folder Options > View > Files and Folders, when the keys is enabled this option is hidden to the users so they're unable to disable.  

Many thanks in advance!