The latest dot release of PowerCMS already comes with Advanced File Management (KFM) enabled by default, which is probably why there is no documentation for it. But if you do own HTMLEditor, there is documentation that explains how to set up the Advanced File Management.
When you upload in PowerCMS, it creates a files folder and then creates a cms_files folder inside of it. When you launch the KFM, it will set the Root to the Files folder and under it you should see the cms_files folder. If you select the cms_files folder when uploading then all the files will be uploaded to the cms_files folder otherwise they will just be placed under the files folder. in regard to the thumbs folder, those are just files that created by the KFM, and they will be used when you do image editing, such as resizing or cropping.
