Looking for HTML options in Outlook 2007?

This is a registry only option now

HKEY_CURRENT_USER\Software\Microsoft\Office\12.0\Outlook\Options\Mail
Insert-> New-> DWORD
Name; Send Pictures With Document (note the spaces)

With a value of 1 you’ll include the picture with the message instead of as a link.
If the value is set to 0 or when the key is missing you’ll send a link.