Ok is there a way to remove the margin around the image all together? So when the thumbnails are generated it is the image only?
No, if you set the smallest thumb to be 100px, it's going to create thumbs that are 100px by 100px square, photos that aren't absolutely square when uploaded will be centered within the 100px square thumbnail box being created during the upload process, and if the photo happens to be horizontal in nature the excess showing on the top and bottom of the photo will be that of the background canvas set for thumb.
And, no the background color of the thumbs can't be set to be transparent, if the original photo is in jpeg format (which most will be) so will the thumbs be in a jpeg format, and the jpeg format doesn't support transparencies.
You basically have 3 choices, you can have the thumbs with the rounded corner border, or simply uncheck the rounded corners in the admin and just have a blank white background, or use my aesthetic modification to make the background black so the images all appear to be square.
The only true way of not having any background color show for thumbnail images would be by implementing a cropping method which I mentioned in my original post above.
Or where is the location to the actual image uploaded?
All photos and thumbs are uploaded to various folders located in the "media" folder.