If no featured image... Grab the first image in the post content.. Or generate a thumbnail based on youtube or vimeo video if that is included instead of an image... then save the image as featured image...

grab thumb url.php

<?php
/**
 * Retrieves the thumbnail URL to use for a post
 * @param  string $text The body of the post (get_content)
 * @param  string $size The image size to retrieve
 * @return string       The image URL to use
 */
function get_thumb_url($text, $size){	
    global $post;
    $imageurl = FALSE;
    $needs_resize = TRUE;
    
    // Check to see which image is set as "Featured Image"
    $featuredimg = get_post_thumbnail_id($post->ID);
 
    // Get source for featured image
    $img_src = wp_get_attachment_image_src($featuredimg, $size);
    if ($img_src!==FALSE) {
        $imageurl = $img_src[0];
        $needs_resize = FALSE;
    }
    
    // If there is no "Featured Image" set, move on and get the first image attached to the post
    if (!$imageurl) {
        // Extract the thumbnail from the first attached image
        $allimages = get_children('post_type=attachment&post_mime_type=image&post_parent=' . $post->ID );
        
        foreach ($allimages as $img){
            $img_src = wp_get_attachment_image_src($img->ID, $size);
            break;
        }
        // Set $imageurl to first attached image
        $imageurl=$img_src[0];
    }
    
    // If there is no image attached to the post, look for anything that looks like an image and get that
    if (!$imageurl) {
        preg_match('/<\s*img [^\>]*src\s*=\s*[\""\']?([^\""\'>]*)/i', $text, $matches);
        $imageurl= array_key_exists(1, $matches) ? $matches[1] : FALSE;
    }
    
    // If there's no image attached or inserted in the post, look for a YouTube video
    if (!$imageurl){
        preg_match("/([a-zA-Z0-9\-\_]+\.|)youtube\.com\/watch(\?v\=|\/v\/)([a-zA-Z0-9\-\_]{11})([^<\s]*)/", $text, $matches);
 
        $youtubeurl = array_key_exists(0, $matches) ? $matches[0] : FALSE;
        $videokey = array_key_exists(3, $matches) ? $matches[3] : FALSE;
        if (!$youtubeurl) {
            preg_match("/([a-zA-Z0-9\-\_]+\.|)youtu\.be\/([a-zA-Z0-9\-\_]{11})([^<\s]*)/", $text, $matches);
            $youtubeurl = array_key_exists(0, $matches) ? $matches[0] : FALSE;
            $videokey = array_key_exists(2, $matches) ? $matches[2] : FALSE;
        }
        if ($youtubeurl)
            $imageurl = "http://i.ytimg.com/vi/{$videokey}/0.jpg";
    }

    //	If there's no image attached or insert in the post, and no youtube video, look for a Vimeo video:
    if (!$imageurl){
		$pieces = explode(" ", $text);
		foreach ($pieces as $piece) {
			if (preg_match("/(^|[\n ])([\w]*?)((ht|f)tp(s)?:\/\/[\w]+[^ \,\"\n\r\t<]*)/is", $piece)) {
				$videokey = get_vimeoid( $piece );
				if( !empty($videokey) )	break;
			}
		}
		if ($videokey)
			$imageurl = getVimeoThumb( $videokey );
    } 

    if ($needs_resize===TRUE) {
        $imageurl = resize_and_save_image($imageurl, $size);
    }
    
    // Spit out the image path
    return $imageurl;
}
 
 function getVimeoThumb($id) {
    $data = file_get_contents("http://vimeo.com/api/v2/video/$id.json");
    $data = json_decode($data);
    return $data[0]->thumbnail_medium;
}

function get_vimeoid( $url ) {
	$regex = '~
		# Match Vimeo link and embed code
		(?:<iframe [^>]*src=")?         # If iframe match up to first quote of src
		(?:                             # Group vimeo url
				https?:\/\/             # Either http or https
				(?:[\w]+\.)*            # Optional subdomains
				vimeo\.com              # Match vimeo.com
				(?:[\/\w]*\/videos?)?   # Optional video sub directory this handles groups links also
				\/                      # Slash before Id
				([0-9]+)                # $1: VIDEO_ID is numeric
				[^\s]*                  # Not a space
		)                               # End group
		"?                              # Match end quote if part of src
		(?:[^>]*></iframe>)?            # Match the end of the iframe
		(?:<p>.*</p>)?                  # Match any title information stuff
		~ix';
	
	preg_match( $regex, $url, $matches );
	
	return $matches[1];
}
 
/**
 * Creates a resized image, attaches it to the parent post as a featured image
 * @param  string $url  The URL of the image to resize
 * @param  string $size The image size (e.g. 'thumbnail', 'medium')
 * @return string       The resized image's URL
 */
function resize_and_save_image($url, $size) {
    global $post;
    $image = wp_get_image_editor($url);
    if (!is_wp_error($image)) {
        // Loads dimensions for the custom size
        extract(get_image_crop_dimensions($size));
 
        // Determines the location where the new image should be saved
        $upload_dir = wp_upload_dir();
        $path = $upload_dir['path'];
        $dest = $image->generate_filename($width.'x'.$height, $path);
 
        // Resizes and saves the new image
        $image->resize($width, $height, $crop);
        $image->save($dest);
 
        // Saves the new image in the media library
        $wp_filetype = wp_check_filetype(basename($dest), NULL);
        $attachment = array(
            'guid' => $upload_dir['url'] . '/' . basename($dest), 
            'post_mime_type' => $wp_filetype['type'],
            'post_title' => preg_replace('/\.[^.]+$/', '', basename($dest)),
            'post_content' => '',
            'post_status' => 'inherit'
        );
        $attach_id = wp_insert_attachment($attachment, $dest, $post->ID);
 
        // Includes image.php so wp_generate_attachment_metadata() will work
        require_once( ABSPATH . 'wp-admin/includes/image.php' );
        $attach_data = wp_generate_attachment_metadata($attach_id, $dest);
        wp_update_attachment_metadata($attach_id, $attach_data);
 
        // Sets the new image as the post's featured image
        update_post_meta($post->ID, '_thumbnail_id', $attach_id);
 
        // Returns the new source
        $new_url = wp_get_attachment_image_src($attach_id, $size);
        return $new_url[0];
    } else {
        return FALSE;
    }
}
 
/**
 * Retrieves the dimensions for a given image size
 * @param  string $size The image size (e.g. 'thumbnail', 'medium')
 * @return array        The width, height, and crop values for the image size
 */
function get_image_crop_dimensions( $size ) {
    // Checks if the image is one of the default WP sizes
    if (in_array($size, array('thumb', 'medium', 'large'))) {
        $width  = get_option($size . '_size_w');
        $height = get_option($size . '_size_h');
        $crop   = $size==='thumb' ? TRUE : FALSE;
    } else {
        // Loads the custom image sizes
        global $_wp_additional_image_sizes;
        if (array_key_exists($size, $_wp_additional_image_sizes)) {
            $width  = $_wp_additional_image_sizes[$size]['width'];
            $height = $_wp_additional_image_sizes[$size]['height'];
            $crop   = $_wp_additional_image_sizes[$size]['crop'];
        } else {
            // Without a match, the thumbnail size is the default
            $width = get_option('thumb_size_w');
            $height = get_option('thumb_size_h');
            $crop = TRUE;
        }
    }
 
    return array(
        'width'  => $width,
        'height' => $height,
        'crop'   => $crop,
    );
}