Insert Images into Your Gmail Messages

Well, it's around 3am . one of my frd asked how to insert image in gmail  

Solution: To put images into your messages or attach images  want to inline them. Just turn on "Inserting images" from the Labs tab under Settings

Make sure you're in rich formatting mode, or it won't show up. Click the little image icon, and you can insert images in two ways: by uploading image files from your computer or providing image URLs.

Gmail doesn't show URL-based images in messages by default to protect you from spammers, so if you're sending mail to other Gmail users, they'll still have to click "Display images below" or "Always display images from ..." to see images you embed.