Actually, it works very easy.
Create a new message, put the cursor to the position where you want the picture to appear and click on INSERT, on the drop-down menu do NOT select file, instead go to PICTURE ( a bit further down where the arrows appear) and you will get a selection window. Browse to the picture file you want to place in the mail, select positioning, alternate text (the text which appears if the picture is not loaded yet) and say ok.
You will INCLUDE instead of ATTACH, that is the difference.