Outlook has security enabled which is blocking the pictures. If you right click on the pictures, and click security settings. From here you can enable pictures.
Apparently this is caused by a full temporary folder keeping you from viewing pictures. Locate outlooks temp folder and clean it out. It should clear up your problem.
Usually the email program itself is not the problem. Check your anti virus software and see if it has blocked the delivery of pictures to your computer. Pictures can sometimes be used to id your computer to other systems so most anti virus programs have blocks. If that doesnt work make sure check outlook properties for blocked pictures
Check your firewall settings. Check the security settings of the outlook options and check the security settings of the internet explorer because they are transferred over the registry to outlook.