The Send/Receive Button is similar to the "SYNC" Button in Windows Live Mail.

With the pictures its a bit hard to explain but:
If you want to send the picture as an attachment all you have to do is click attach and choose the file. If you want to send it Inline then clicking insert> picture> inline will solve the problem but i don't think you can move it around from the original place. You could try sending it as an attachment.

Good Luck