Depending on what email program you have will depend on if you can insert the picture. I know that Outlook Express does not allow inserting. I know that Eudora does.
To check, create a new email. Now select attachment. The window you get will allow you to browse your computer to select what you want to attach. When you click on the title of the file you want, look at the bottom of the window. You should have the choices of attach, cancel and insert - if the program allows it.
If you want to put a picture in a message on this forum... then you can't. When you attach it to the message and some one clicks on the link, their browser will open a new window to see the picture.