Android: Creating contact thumbnail from name initials

Well you're on the right track. Try it something like this.

ImageView iv=(ImageView)findViewById(R.id.imageView1);

Bitmap b=Bitmap.createBitmap(view.getWidth(), view.getHeight(), Bitmap.Config.ARGB_8888);
Canvas c = new Canvas(b);
c.drawText(initials,x,y,paint);
iv.setImageBitmap(b);

You should create your own logic to center the text. You could use some of the following helper method Paint.getTextSize() to find out how much space the text needs.