Beside fruitycat's method, you can also add pictures to an e-mail you are working on by clicking in the text pane where you usually type and click that little picture of a mountain above the textpane. That will ask you to browse to where the image is stored on your computer.
Click on the image you want to insert and press OK. That will put the picture in your document at the place where your cursor is.
To shift the picture(s) around on the page, first click on it so that it changes shade, it is 'ranged'. Then place the cursor just in front of the image and press the spacebar, that will shift it to the right. You can instantly move it to the left or right of the page by clicking one of those icons with stripes, always remember to click in the image first so the computer knows what to move. You can move text all over the place too by ranging it (run the corsor over it while holding down the left mouse button).
Before you start adding the pictures, it makes life a lot easier if you copy them all to desktop, then you know where to navigate to.