See these links for information:

Outlook 2003:

Excellent Answer below!

http://www.officekb.com/Uwe/Forum.aspx/word-docmanagement/11029/Document-picture-problems-2003

Macro to help with resizing images: http://www.officekb.com/Uwe/Forum.aspx/outlook/22034/Showing-attached-pictures

Outlook Express:

http://www.fjsmjs.com/IE/redx.htm
And:
http://insideoe.tomsterdam.com/faqs/why.htm#nopreview
And:
http://www.oehelp.com/noimg.aspx
And:
http://support.microsoft.com/?kbid=246186