rickcf, No need to be grouchy ... wow.
This is something that happens because of how Windows XP does things, not Paint.NET.
Paint.NET used to force the dialog to always show thumbnail view. Everyone yelled at me about it. Since I no longer use XP and thus don't care, I removed that behavior.
I do not know why XP is forgetting your preferences. I'm sure if you open that folder in Explorer and set it up how you want, it'll remember (or not ).
Win7 and Vista work as expected here.