diff --git a/CMakeLists.txt b/CMakeLists.txt
index 9cea5eba95..29cc3099bb 100644
--- a/CMakeLists.txt
+++ b/CMakeLists.txt
@@ -77,6 +77,7 @@ set(kwin_KDEINIT_SRCS
    effects/boxswitch.cpp
    effects/fallapart.cpp
    effects/drunken.cpp
+   effects/demo_taskbarthumbnail.cpp
    effects/flame.cpp
    effects/shadow.cpp
    effects/test_input.cpp
diff --git a/effects.cpp b/effects.cpp
index 695ff98a1d..90a251c1b1 100644
--- a/effects.cpp
+++ b/effects.cpp
@@ -16,6 +16,7 @@ License. See the file "COPYING" for the exact licensing terms.
 #include "options.h"
 
 #include "effects/boxswitch.h"
+#include "effects/demo_taskbarthumbnail.h"
 #include "effects/desktopchangeslide.h"
 #include "effects/dialogparent.h"
 #include "effects/drunken.h"
@@ -207,6 +208,7 @@ EffectsHandler::EffectsHandler()
     registerEffect("DesktopChangeSlide", new GenericEffectFactory<DesktopChangeSlideEffect>);
     registerEffect("BoxSwitch", new GenericEffectFactory<BoxSwitchEffect>);
     registerEffect("Drunken", new GenericEffectFactory<DrunkenEffect>);
+    registerEffect("TaskbarThumbnail", new GenericEffectFactory<TaskbarThumbnailEffect>);
     registerEffect("Shadow", new GenericEffectFactory<ShadowEffect>);
 
     registerEffect("TestInput", new GenericEffectFactory<TestInputEffect>);
diff --git a/effects/demo_taskbarthumbnail.cpp b/effects/demo_taskbarthumbnail.cpp
new file mode 100644
index 0000000000..54ce7a40de
--- /dev/null
+++ b/effects/demo_taskbarthumbnail.cpp
@@ -0,0 +1,115 @@
+/*****************************************************************
+ KWin - the KDE window manager
+ This file is part of the KDE project.
+
+Copyright (C) 2007 Rivo Laks <rivolaks@hot.ee>
+
+You can Freely distribute this program under the GNU General Public
+License. See the file "COPYING" for the exact licensing terms.
+******************************************************************/
+
+
+#include "demo_taskbarthumbnail.h"
+
+#include <workspace.h>
+#include <client.h>
+
+
+// Note that currently effects need to be manually enabled in the EffectsHandler
+// class constructor (in effects.cpp).
+
+namespace KWinInternal
+{
+
+TaskbarThumbnailEffect::TaskbarThumbnailEffect()
+    {
+    mLastCursorPos = QPoint(-1, -1);
+    }
+
+
+void TaskbarThumbnailEffect::prePaintScreen( int* mask, QRegion* region, int time )
+    {
+    // We might need to paint thumbnails if cursor has moved since last
+    //  painting or some thumbnails were painted the last time
+    QPoint cpos = cursorPos();
+    if(cpos != mLastCursorPos || mThumbnails.count() > 0)
+        {
+        *mask |= Scene::PAINT_SCREEN_WITH_TRANSFORMED_WINDOWS;
+        mThumbnails.clear();
+        mLastCursorPos = cpos;
+        }
+
+    effects->prePaintScreen(mask, region, time);
+    }
+
+void TaskbarThumbnailEffect::prePaintWindow( EffectWindow* w, int* mask, QRegion* paint, QRegion* clip, int time )
+    {
+    Client* c = dynamic_cast< Client* >( w->window() );
+    if( c )
+        {
+        QRect iconGeo = c->iconGeometry();
+        if(iconGeo.contains( mLastCursorPos ))
+            {
+            mThumbnails.append( w );
+            }
+        }
+
+    effects->prePaintWindow( w, mask, paint, clip, time );
+    }
+
+void TaskbarThumbnailEffect::postPaintScreen()
+    {
+    // Paint the thumbnails. They need to be painted after other windows
+    //  because we want them on top of everything else
+    int space = 4;
+    foreach( EffectWindow* w, mThumbnails )
+        {
+        Client* c = static_cast< Client* >( w->window() );
+        QRect thumb = getThumbnailPosition(c, &space);
+        WindowPaintData thumbdata;
+        thumbdata.xTranslate = thumb.x() - c->x();
+        thumbdata.yTranslate = thumb.y() - c->y();
+        thumbdata.xScale = thumb.width() / (float)c->width();
+        thumbdata.yScale = thumb.height() / (float)c->height();
+        // From Scene::Window::infiniteRegion()
+        QRegion infRegion = QRegion( INT_MIN / 2, INT_MIN / 2, INT_MAX, INT_MAX );
+        effects->paintWindow( w, Scene::PAINT_WINDOW_TRANSFORMED, infRegion, thumbdata );
+        }
+
+    // Call the next effect.
+    effects->postPaintScreen();
+    }
+
+QRect TaskbarThumbnailEffect::getThumbnailPosition( Client* c, int* space ) const
+    {
+    QRect thumb;
+    QRect icon = c->iconGeometry();
+
+    // Try to figure out if taskbar is horizontal or vertical
+    if( icon.right() < 40 || ( displayWidth() - icon.left()) < 40 )
+        {
+        // Vertical taskbar...
+        float scale = qMin(qMax(icon.height(), 100) / (float)c->height(), 200.0f / c->width());
+        thumb.setSize( QSize( int(scale * c->width()),int(scale * c->height()) ));
+        if( icon.right() < 40 )  // ...on the left
+            thumb.moveTopLeft( QPoint( icon.right() + *space, icon.top() ));
+        else  // ...on the right
+            thumb.moveTopRight( QPoint( icon.left() - *space, icon.top()));
+        *space += thumb.width() + 8;
+        }
+    else
+        {
+        // Horizontal taskbar...
+        float scale = qMin(qMax(icon.width(), 75) / (float)c->width(), 200.0f / c->height());
+        thumb.setSize( QSize( int(scale * c->width()),int(scale * c->height()) ));
+        if( icon.top() < ( displayHeight() - icon.bottom()))  // ...at the top
+            thumb.moveTopLeft( QPoint( icon.left(), icon.bottom() + *space ));
+        else  // ...at the bottom
+            thumb.moveBottomLeft( QPoint( icon.left(), icon.top() - *space ));
+        *space += thumb.height() + 8;
+        }
+    return thumb;
+    }
+
+} // namespace
+
diff --git a/effects/demo_taskbarthumbnail.h b/effects/demo_taskbarthumbnail.h
new file mode 100644
index 0000000000..5270bee48a
--- /dev/null
+++ b/effects/demo_taskbarthumbnail.h
@@ -0,0 +1,49 @@
+/*****************************************************************
+ KWin - the KDE window manager
+ This file is part of the KDE project.
+
+Copyright (C) 2007 Rivo Laks <rivolaks@hot.ee>
+
+You can Freely distribute this program under the GNU General Public
+License. See the file "COPYING" for the exact licensing terms.
+******************************************************************/
+
+#ifndef KWIN_TASKBARTHUMBNAIL_H
+#define KWIN_TASKBARTHUMBNAIL_H
+
+// Include with base class for effects.
+#include <effects.h>
+
+
+namespace KWinInternal
+{
+
+/**
+ * Render small thumbnail of window next to it's taskbar entry when the cursor
+ *  is above the taskbar entry.
+ * Note that this functionality will be replaced in the future so that taskbar
+ *  itself can request a thumbnail to be rendered in a give location with a
+ *  given size.
+ **/
+class TaskbarThumbnailEffect
+    : public Effect
+    {
+    public:
+        TaskbarThumbnailEffect();
+
+        virtual void prePaintScreen( int* mask, QRegion* region, int time );
+        virtual void prePaintWindow( EffectWindow* w, int* mask, QRegion* paint, QRegion* clip, int time );
+        virtual void postPaintScreen();
+
+
+    protected:
+        QRect getThumbnailPosition( Client*c, int* space ) const;
+
+    private:
+        QList< EffectWindow* > mThumbnails;
+        QPoint mLastCursorPos;
+    };
+
+} // namespace
+
+#endif