One thing that really bugs former Outlook express users when they switch to outlook is the lack of inline display of images in the preview pane.

There is not a setting you can enable to display images inline - Outlook does not support it. You can use VBA to create a picture viewer so it's easier. See http://www.slipstick.com/mail1/inline.htm for the VBA code you'll need or an add-in, if you aren't comfortable playing with VBA.