If its a linked image and not an embedded image, then you have to unblock it by going to Tools | Options | Security and unchecking the box to block external content.
If embedded images are not working, then the registry associations for the images may be wrong. see www.oehelp.com/noimg.aspx I just checked jpg in Vista and its the same as indicated on that page.
steve
Some emails have red x's in a box. How do I lose the x's and still read the message in the message pane?