Hi,
If you make add-in for Outlook 2007 or higher try to add the following code before newMail.Send():
Attachment attachment = newMail.Attachments.Add( @"E:\Pictures\image001.jpg" , OlAttachmentType.olEmbeddeditem , null , "Some image display name" ); string imageCid = "image001.jpg@123"; attachment.PropertyAccessor.SetProperty( "http://schemas.microsoft.com/mapi/proptag/0x3712001E" , imageCid ); newMail.HTMLBody = String.Format( "<body><img src=\"cid:{0}\"></body>" , imageCid );
Of course you can insert the tag "img" in the existing html body instead of override it like in my example.