It depends on how you attach/embed the image. (I tested in Fx13.)

If I attach the image as a picture, it works.

If I copy a file from a Windows Explorer folder or the desktop and paste into the message, then Firefox/Hotmail embeds a data URL. It looks normal while I'm composing the message, but Hotmail strips it out when I send it and replaces it with the gray square.

If I right-click and copy an image on a website, and then paste it into the message body, Hotmail insert an image tag that links back to the source of the image.

Does that match your experience?

If I attach the image as a picture, it works

Right clicking an image in a website and pasting it seems to work, I can't tell if it locates the URL, looked at the source for the page and the image properties and couldn't find the URL's main name in the source. Don't necessarily know what I'm doing here.

My problem is cos I'm doing Alt Prnt Scrn and inserting that with Cntrl v or dragging and dropping from thumbnails in Explorer, then it definitely becomes a grey square.

I am having the same issue. copy & paste a picture from desktop, send the email and the picture ends up being a little grey square. How do I fix this please??

Hi buccarasta, I haven't found a solution for this. What I get is:

• Copy/paste - Hotmail: Firefox inserts the image as a "data" URI. If you view the source of the message in Outlook 2010, you can see the URI is there but Outlook 2010 doesn't convert it to an image. In Hotmail, the URI is converted to the gray square link. IE ignores any attempt to paste an image from the file system. Same result with drag and drop. (Also tested in Firefox 11 Portable Edition, and it had the same issue.)

• Copy/paste - Gmail: Firefox inserts the image as a "data" URI. If you view the source of the message in Outlook 2010, you can see the URI is there but Outlook 2010 doesn't convert it to an image. In Gmail, in the Sent item, the image is simply gone.

Both of these webmail sites are failing to convert the data URI back to an image. Perhaps for security reasons??

For the time being, attaching images appears to be the best approach.

(Maybe someone can fix this with an add-on? But I suspect it will involve hosting the images on the web somewhere and just making that easier.)