Outlook 2003 embedded image display.

[NicoNicoNico]

Hello;

I have a user that when he receives an email that has an embedded image all
he gets is a red x where the image should be. If he hits reply or forward
the image shows up in the resulting email. I have unchecked the setting
under Tools|Options|Security|Automatically Download Picture Settings and I
have verified that he is set to use HTML for emails.

The machine is a newer Toshiba M5 with 2 gigs of RAM running XP Pro SP2 and
Office 2003 Enterprise. It is on a domain and the user has local admin
rights.

Any Ideas?