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For the Sender. From OE HELP:
To insert a picture into a message
1.. Click the place in the message where you want the image to appear.
2.. On the Insert menu, click Picture, and then click Browse to find the
image file.
3.. Enter Layout and Spacing information for the image file as needed.
Notes
If you cannot select the Picture command, make sure HTML formatting is
turned on by clicking the Format menu in the message window and then clicking
Rich Text (HTML). A black dot appears by the command when it is selected.
If message recipients are not able to view your inserted images, on the
Tools menu, click Options. Click the Send tab, click HTML Settings, and then
make sure that Send pictures with messages is selected. Then resend your
message.
To insert a background picture into your message, in the message window, on
the Format menu, point to Background, and then click Picture. Click the Browse
button to search for the file you want to use.