Classic Outlook image show as a small rectangular open box with nothing in it

If you have a blank box shaped/sized like the graphic or image, you have Show picture placeholders enabled (a feature for slow Internet connections). 

Check your Picture Placeholder setting in Classic Outlook

1. Click the New Email button. 
2. Go to the new message's File, Options dialogue.
3. Click Mail, then Editor Options. 
4. Select Advanced and look near the bottom of the dialogue for the option to Show Picture Placeholders.
5. Uncheck the box to Show picture placeholders 
6. Close the dialogue, then close the message.
   
   After changing the settings, close the message. Do not send it!
   You need to close the message to change the global setting.