Attached sample plays fine with vlc and mplayer -demuxer ogg -vc theora, it shows initial artefacts with ffmpeg (and ffplay and mplayer -demuxer lavf -vc theora) that disappear after a few seconds.
ffmpeg -loglevel 99 -v 9 -i bad\ thumbnail\ from\ this\ video.ogv -an -qscale 2 out.avi
FFmpeg version git-N-28581-g4fa0e24, Copyright (c) 2000-2011 the FFmpeg developers
built on Mar 23 2011 06:04:48 with gcc 4.5.2
configuration: --cc=/usr/local/gcc-4.5.2/bin/gcc --enable-gpl
libavutil 50. 40. 0 / 50. 40. 0
libavcodec 52.114. 0 / 52.114. 0
libavformat 52.103. 0 / 52.103. 0
libavdevice 52. 3. 0 / 52. 3. 0
libavfilter 1. 76. 0 / 1. 76. 0
libswscale 0. 12. 0 / 0. 12. 0
[NULL @ 0x11ed650] Probed with size=2048 and score=100
[theora @ 0x11f2250] Theora bitstream version 30201
[ogg @ 0x11ed650] max_analyze_duration reached
Input #0, ogg, from 'bad thumbnail from this video.ogv':
Duration: 00:00:19.06, start: 0.000000, bitrate: 417 kb/s
Stream #0.0, 0, 1/1: Data: skeleton
Stream #0.1, 152, 1/30: Video: theora, yuv420p, 480x270 [PAR 1:1 DAR 16:9], 1/30, 30 fps, 30 tbr, 30 tbn, 30 tbc
Stream #0.2, 286, 1/44100: Audio: vorbis, 44100 Hz, mono, s16, 70 kb/s
Metadata:
ENCODER : ffmpeg2theora-0.24
new_video_stream: video_codec_tag: 0
[buffer @ 0x13b94e0] w:480 h:270 pixfmt:yuv420p
[setdar @ 0x13b9990] a:16/9
[setdar @ 0x13b9990] w:480 h:270 -> dar:16/9 par:1/1
[theora @ 0x11f2250] Theora bitstream version 30201
Output #0, avi, to 'out.avi':
Metadata:
ISFT : Lavf52.103.0
Stream #0.0, 0, 1/30: Video: mpeg4, yuv420p, 480x270 [PAR 1:1 DAR 16:9], 1/30, q=2-31, 200 kb/s, 30 tbn, 30 tbc
Stream mapping:
Stream #0.1 -> #0.0
Press ctrl-c to stop encoding
[theora @ 0x11f2250] vp3: first frame not a keyframe
frame= 560 fps= 0 q=2.0 Lsize= 2032kB time=19.07 bitrate= 873.1kbits/s
video:2013kB audio:0kB global headers:0kB muxing overhead 0.958895%
Hopefully fixed by d459d8e28df12ee69c71c7181380d91e09764374