Insert Images into Gmail
A new Google Lab is available for inserting images into Gmail messages.
Turn on the appropriately named “Inserting images” Lab by going to Settings > Labs in Gmail. Find the “Inserting images” Lab, click Enable to turn it on, and scroll down to click Save Changes at the bottom of the window.
Now you’ll see a new icon on your Gmail toolbar:

Use this icon to insert images into Gmail email messages by uploading image files from your computer or providing links (URLs) to images that reside elsewhere on the web.
Gmail doesn’t show URL-based images in messages by default to protect you from spammers, so recipients may have to click “Display images…” or “Always display images from …” to see images you embed.