It is possible that the issue is on the senders end.
Supposing your sender is using Outlook Express, they would choose Tools | Options from the menu, click the Send tab, click the HTML Settings button (the one in the "Mail Sending Format" panel), and check the box "Send pictures with messages".
I have Win XP S2 using Outlook EX. along w/ spybot/adaware and McAff firewall. Three out of five times when I recv mail w/ pics I get the bloody red X. I've tried everything-host,settings, view, etc, etc and still no fix. Everything I've read so far seems to deal w/ IE and browser pages, this is not my problem, just my e mail. I've been told that MS put this restriction in XP so you would not get any obscene images. True or not, I would like to see the pics that my friends mail to me. any NEW tips folks?