Creating thumbnails in email?

This is a reprint of a question I asked in the early days of Fluther. Now there seems to be a few more tech-heads around, so I thought I’d try again.

I’d like to create essentially an email letterhead with a small, clickable photo in my work-related emails. I have a disk of pics to choose from, but I don’t know how to go about shrinking then imbedding them.