This week's book giveaway is in the OCMJEA forum. We're giving away four copies of OCM Java EE 6 Enterprise Architect Exam Guide and have Paul Allen & Joseph Bambara on-line! See this thread for details.
You can include images in two ways:
1) as a link to a remote website. The src must point to the absolute URL of the image: <img src="http://www.coderanch.com/path/image.png">
Note that most email clients have options to not download these images until the user explicitly tells the client to download them.
2) as an inline image. The image is a special kind of attachment.
Now you can possibly do this with JavaMail, but to be honest, I don't know how. You may want to use Aoache Commons Email; the HtmlEmail class has several embed methods. The example from the HtmlEmail class' API:
This will embed two images: the my/image.gif image, and some PNG image.