So far I have
<div itemscope itemtype="http://schema.org/Product"><span itemprop="image" class="fn"><img src="<?php echo $product['thumb']; ?>" alt="<?php echo $product['name']; ?>" /></span></div>
I understand that the fn is supposed to be a value as in <span class="fn">Name</span>, but doesn't an image count as one?
Syntax's: http://schema.org/Product
Name has the type Text.
That means that the subelement should be a text node, hence you cannot nest other elements, such as an < img ... /> element.
The image property expects a URL as value. You have to use it on an element like img (or a etc.), but not on span.
Note that class names aren’t relevant for Microdata and/or Schema.org. fn appears to be a value of a Microformat (which is something different than Microdata).