Microsoft has restored the ability to add photos directly to mail body, the way we used to do. The feature was disabled due to an incompatibility with Internet Explorer that caused some security flaw.
Now the security vulnerability has been resolved, Windows Live Hotmail users are able to once again add images directly to their emails. Nowadays Microsoft is focusing on next iteration of Windows Live Hotmail, namely “Wave 4”. Wave 4 M1 has already introduced to Windows Live Hotmail.