I think TrevorB edited post #1 and added the "in-line" image comment after he fixed the problem that I reported that morning. Thanks TrevorB!
turetzsr was right, I missed that line that said to use the "Problem" button to report problems. (i.e. don't post here). Thanks turetzsr, I missed that.
The link that I gave pointed to a message in my Inbox, so unless you were logged in as me, then it wouldn't mean anything. I guess I gave the URL with the idea in mind that the "administrator" could probably read my email, but forgot that it's probably an internal index that the webmail system (horde?) uses and that decoding it to get to the actual message might be more trouble than it is worth. Sorry 'bout that.
I think the initial display of an HTML message is usually raw HTML and as you stated an in-line image would look like "machine code gibberish." I kind of view this as a feature though, because I don't have to wait for images, applets, or other objects to load. If I want to see the html part of the message, most of the time, I can select the link to the html part and webmail/horde will pop open a new browser window and throw the HTML at the window and let the browser interpret it.