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Now you won’t have to look for tricks to add images to your e-mail messages as you can now add images to your e-mail messages right within from Gmail. To get this functionality, you’ll need to enable Inserting Images Labs feature in Labs settings panel of Gmail.
Once you enable this feature, you’ll see a tiny icon when you compose a message clicking on which will open a dialog box that gives you option to either upload image from your computer or use an image from the web. If you choose web address, the moment you type in URL of the image, you’ll see how the image will look.
After you click Add Image, you can set the size of the added image. Make sure you have enabled rich text editing in Settings panel. And if you add images from Web, the recipient will still have to click Display images below to see the images though the images you upload from your computer will be displayed without any prompt. [via]