Set an uploaded image as the Featured Image?

Is there a way to automatically set an uploaded image as the Featured Image? I found some code to place the image as a thumbnail, so that solves half my problem. But I'd like it to be the featured image as well.

Thanks in advance!
Donna

@guildmaster here is what I am using (please correct me if this is not the best practice)

add_action("gform_post_submission", "post_submission_handler");
function post_submission_handler($entry){
    global $wpdb;

    $results = $wpdb->get_results($wpdb->prepare("  SELECT l.*, field_number, value
                            FROM wp_rg_lead l
                            INNER JOIN wp_rg_lead_detail ld ON l.id = ld.lead_id
                            WHERE l.id=%d
                            ORDER BY  l.id, field_number", $entry["id"]));

    foreach($results as $result){
       	$post = $result->post_id;
       	$images =& get_children( 'post_type=attachment&post_mime_type=image&post_parent='.$post );
		if ( empty($images) ) {
			// no attachments here
		} else {
			foreach ( $images as $image ) {
				$featured =& add_post_meta($post, '_thumbnail_id', $image->ID );
				break;
			}
		}

	}
}

@ guildmeister - Can you please point me to the code that you found to add the image as a thumbnail? Thanks!

Doesn't work with WP 3.2. Go here for the fix:

http://www.gravityhelp.com/forums/topic/support-post-thumbnails