Are you inserting them as a picture or an attachment? If you use 'Insert' > 'Picture' the picture will appear in the body of the mail. Rather insert the image file as a 'File attachment'.

What beeuuem suggests should work, but if you are still having probs, in the new mail message window, change the Format of the email to Plain Text (go to Format menu and click Plain Text).

Or permanently change all new mails to Plain Text, in the main OE windows, Tools, Options, Send tab and change Mail Sending Format to Plain Text.

The menu says Insert but the options include File Attachment and Picture. The first will attach the file, and the second will place the image in the body of the mail.

See here

Insert menu in OE

That's Outlook Express 6 - which was the standard for several years until replaced by Windows Mail. Which menus do you have across the top of a new email window? Should be

File Edit View Insert Format Tools Message Help

I'm not quite sure if you're saying you don't have any menus - or different menus. Where are you finding the Insert command?