Sending messages with images was a bit cumbersome with Gmail because it didn’t have default functionality to insert images. Sometimes, I even sent mail from my Yahoo! Mail account to Gmail and forwarded it for ease of doing it. There were other tweaks as well.
Now a new Labs feature will help you do it more easily. For this you will have to activate this labs feature. It it very easy. Go to https://mail.google.com/mail/#settings/labs
Scroll down to Insert Images and enable it.
Hat Tip : Insert inline images in Gmail