Pagination on WordPress posts within page - wordpress

Question

I'm trying to do a custom archive for all posts, but I want it to look a little different than the category-specific archives. I've achieved this so far by placing the code below into a page on my site.
Is it possible to add pagination to something like this? I thought that 'paged' => $paged line might do it, but no such luck.
Here's my code: (I'm using a custom thumbnail size if you were wondering what that refers to.)
<?php
global $post;
$args = array(
'posts_per_page' => 3,
'offset' => 0,
'paged' => $paged
);
$thumbnails = get_posts($args);
foreach ($thumbnails as $post)
{
setup_postdata($post);
?>
<div class="featuredarticle">
<h4 class="entry-title"><?php the_title(); ?></h4>
<div class="featuredimage">
<?php the_post_thumbnail('featured'); ?><br />
</div>
</div>
<p><?php the_excerpt(); ?></p>
<div class="entry-utility">
<span class="read-more">Read More</span>
</div>
<?php
}
?>

Answer 1

This code works very good within a page querying posts and use pagination.
<?php
/**
* Template Name: Page of Books
*
* Selectable from a dropdown menu on the edit page screen.
*/
?>
<?php get_header();
if ( have_posts() ) while ( have_posts() ) : the_post();
the_content();
endwhile; wp_reset_query();
?>
<div id="container">
<div id="content">
<?php
$type = 'book';
$args=array(
'post_type' => $type,
'post_status' => 'publish',
'paged' => $paged,
'posts_per_page' => 2,
'caller_get_posts'=> 1
);
$temp = $wp_query; // assign orginal query to temp variable for later use
$wp_query = null;
$wp_query = new WP_Query($args);
?>
<?php
get_template_part( 'loop', 'index' );?>
</div><!-- #content -->
</div><!-- #container -->
<?php get_sidebar(); ?>
<?php get_footer(); ?>