The -o switch just prevents the final message (and allows customizing the output), but maybe you forgot to specify the actual files. Beside the options, the command line must also specify the files or folders to resize.
I presume, that using . (dot) to indicate that you want to resize images in the current folder should be enough. But it may interfere with your second requirement - putting the images into a subdirectory. The -c switch puts the files into current directory instead of to the directory with source images. If you make the thumbs directory current and then resize all images in parent directory using .. , it should work. The -r switch should also be present to prevent the tool to also attempt to resize images in the thumbs folder.
To sum it up, if you have a .bat file, it should look like this:
cd thumbs
PhotoResizeW90.exe -o -c -r ..
thumbs subdirectory must already exist and the directory with images must be the current directory of the process.
Hope that helps