Broadly speaking, it is up to a user's e-mail client software how to deal
with the emails you send. Each package, and each version of a package may
behave differently, and the behaviour may be affected by options the user
has selected in their package.

For example, the e-mail client I usually use never displays any images
in-line and does not have an "attachments" drop-down at the top right of the
viewing pane as Outlook and OE do. In fact it doesn't even decode the
MIME-encoded message text unless I tell it to. So if you sent pictures to me
it's almost guaranteed that I will not see them unless I have a good reason
to look at them.

That said, I'm not an expert, but there are I think three main ways that
images can be represented in MIME format messages:
a. the actual picture can be encoded and marked as "inline"
b. the actual picture can be encoded and marked as "attachment"
c. a URL can be inserted pointing to the picture file somewhere on the
Internet. The e-mail client may or may not try to follow the link and
display the picture automatically.

You may be able to influence which of those methods is used, but it's still
ultimately up to the recipient's e-mail client how to deal with such images.

--
Peter Jamieson
MS Word MVP