New in Gmail Labs: Inserting images inside emails

Now images can be inserted inside (g-)emails!That means you can add images between two lines of a paragraph if you want.This is a new Gmail Labs feature.

To use this goto Settings>> Labs >> and enable "inserting images" it >> save changes.Now you will be able to see button to add images above mail composing box.You can add images from your computer or any URL.Size of image added can be controlled by clocking on image and selecting small,medium or large.You can resize image by dragging corners too..

image:Googlesystem Blog

Official Gmail Blog: New in Labs: Inserting images