By default, for security purpose, images in email are disabled in Outlook.

I am using Outlook 2003 in Window XP. Doing the following steps, you can view images that are attached with emails.

1. Start Outlook.
2. On the Tools menu, click Options.
3. Click the Security tab, and then click Change Automatic Download Settings.
4. In the Automatic Picture Download Settings dialog box, click to clear the Don’t download pictures or other content automatically in HTML e-mail check box.
5. Click OK two times.

In Outlook 2007, I believe you can achieve the same thing by doing:

1. Click on “Tools”, then “Trust Center”.
2. Click on “Attachment Download”.
3. Uncheck the box next to “don’t download images automatically…”