Finally!  Google Labs has made it possible to insert images directly into Gmail messages.  All you need to do is go to the “Labs” under “Settings.”  Scroll down until you see the option:

Google Mail:  Settings / Labs tab - Inserting Images

Click on “Enable”, save your changes, and the next time you compose a message you’ll see a new icon above the message body:

Inline picture icon - Google Mail

Just click on the icon and you can upload an image from your hard drive or insert a URL:

Inserting image into Gmail message

You can adjust the size of the image right in the message; very handy!  Here’s the final result:

Image inserted into Gmail message

One requirement:  make sure you’re in rich formatting mode, or it won’t work.  Enjoy – and if you aren’t using Gmail, why aren’t you??  Check it out – you’ll love its capabilities.  Here’s a good overview from Google:  10 Reasons to Use Gmail

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