This question was asked a couple of days ago. I'm going to direct you to Grif's post for directions that he posted in the Newbies Forum. This is assuming that you are using Outlook Express. You did not state your OS and these directions are for Win 98 but the directions are the same for XP too.
When forwarding e-mail with pictures, all my friends receive is a box with a red x in the corner. Why doesn't the picture show up and how can this be fixed?