customizing recent posts

Inside your post loop:

<div class="recent-post">
    <div class="thumbnail">
        <?php
        if(has_post_thumbnail()) {
            the_post_thumbnail();
        } else {
            // show a default image if no featured image is specified
            echo '<img src="'.get_bloginfo("template_url").'/images/img-default.png" />';
        }
        ?>
    </div>
    <div class="title">
        <a href="<?php the_permalink(); ?>"><?php the_title(); ?></a>
    </div>
</div>

float the thumbnail div to the left and give the title div an appropriate margin/padding so they don’t overlap, and apply some clearfix to the recent-post class and then style to fit.