Well, after thinking more about this, there is probably a way to send that inline. Basically, we can do it manually in Outlook. For example, you go in LViewPro, you open an image, you copy it and paste it in the Outlook message. You'll see that the image will appear as is. This is still interpreted as HTML by Outlook. However, the image will be inline and not coming from a Web Server. Outlook will generate something like this in View Source:

<IMG src="cid:667122717@25112002-1ef3"

However, I'm not sure how you can handle that within code from that approach. Probably with Outlook automation this could be achieve.