Automatically assign featured images to WordPress posts from the attached images.

auto_featured_image.php

<?php

function auto_featured_image() {
	global $post;
	if (!has_post_thumbnail($post->ID)) {
		$attached_image = get_children( "post_parent=$post->ID&post_type=attachment&post_mime_type=image&numberposts=1" );
		if ($attached_image) {
			foreach ($attached_image as $attachment_id => $attachment) {
				set_post_thumbnail($post->ID, $attachment_id);
			}
		}
	}
}
// Use it temporary to generate all featured images
add_action('the_post', 'auto_featured_image');
// Used for new posts
add_action('save_post', 'auto_featured_image');
add_action('draft_to_publish', 'auto_featured_image');
add_action('new_to_publish', 'auto_featured_image');
add_action('pending_to_publish', 'auto_featured_image');
add_action('future_to_publish', 'auto_featured_image');