Adding images to post excerpts can be done in number of ways but the simplest & best way is the concern of most of the wordpress users. Why? Adding images using custom fields is good but not the best.
What if, after writing so many posts to your blog & then after going to add images via custom field separately for each post. Its hectic.
Why not go for a solution that is just 2 clicks away?
Yes, I am talking about the most easiest & reliable way to add thumbnail images to posts excerpts with these benefits:
 Using the first image of any post as the thumbnail image of that post wherever you show excerpts (archive page, feed, category page).
 No matter, which medium you use for storing the images used in the post, this method will work.
 NO need to work with custom fields. Using images that are already in the post.
In simple words, this method will work also for the images that are actually NOT hosted on your wordpress. So, you can also use blogger, photobucket or any other as your image storage medium.
So, just download the Thumbnail for Excerpts plugin for wordpress. Upload it to the wordpress directory & Activate it. All Done, it will do all the job for you. Simple & Easy.