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.
I have done this before. Basically you need to have an img tag in your html/jsp file that uses an action for the src. Instead of "/app/myimage.jsp" you would use "/app/DisplayImage.do?id=123". Your DisplayImage action would pull the image out of the database and stream the contents to the response. Your action would then return null from the execute method. I do not have the source code handy, but I could probably dig it up.