If you see "X" instead of pictures in emails, probably the outlook security setting set to
"Restricted sites".
To allow pictures in outlook 2003:

1. Open outlook.
2. In main windows go to > tools > options > security
3. IN security zones pane check the dropdown list to "internet"
4. Save changes.

To allow pictures in outlook 2007:
1. Open outlook.
2. In main windows go to > tools > trust center
3. Navigate to "automatic download" in left pane
4. Uncheck "don’t download pictures automatically in html email"