Actually, Thailand's withdrawal of their Ambassador is not surprising, as diplomats themselves should be aware.  When it comes to Cambodia, Thailand has a history of

Thaksin Shinawatra
 

over-reacting, with the still-ongoing dispute about the 11th century temple a prime example.  Troops massed on the Thai border and even some random shots were reported.  This all over a temple that is patently on Cambodian ground and has been ruled by several international bodies as being the property of Cambodia.  But, with Thailand having always treated Cambodia like a third-class citizen, it's not surprising their latest round of 'diplomacy' came to this.

As for ex-Prime Minister Thaksin Shinawatra, he is a master of manipulation and current Prime Minister Abhisit Vejjajiva is playing into his hands by reacting to every small thing he does. Abhisit though is a novice at politics and, rumor is, he is being controlled by other people more powerful in Thailand. If only Abhisit would ignore what Cambodia is doing, it would give Thaksin even less support.  But with his anger over the Cambodian decision to hire Thaksin as an economic adviser, he is only elevating Thaksin's importance and keeping his name in front of the millions of people in Thailand who still support Thaksin.

Thailand itself has asked for foreign governments to pressure Cambodia to extradite Thaksin when he appears in the country but, as diplomats are already saying Thailand is going about this the wrong way, and as many countries didn't think Thaksin should have been deposed by a military coup in the first place, it's highly unlikely Thailand will get much support for this request.

SOURCES - Bangkok Post - Recalling ambassador seen as 'over-reaction' in dispute