How to “crop” a rectangular image into a square with CSS?

Assuming they do not have to be in IMG tags…

HTML:

<div class="thumb1">
</div>

CSS:

.thumb1 { 
  background: url(blah.jpg) 50% 50% no-repeat; /* 50% 50% centers image in div */
  width: 250px;
  height: 250px;
}

.thumb1:hover { YOUR HOVER STYLES HERE }

EDIT: If the div needs to link somewhere just adjust HTML and Styles like so:

HTML:

<div class="thumb1">
<a href="#">Link</a>
</div>

CSS:

.thumb1 { 
  background: url(blah.jpg) 50% 50% no-repeat; /* 50% 50% centers image in div */
  width: 250px;
  height: 250px;
}

.thumb1 a {
  display: block;
  width: 250px;
  height: 250px;
}

.thumb1 a:hover { YOUR HOVER STYLES HERE }

Note this could also be modified to be responsive, for example % widths and heights etc.