There used to be a number of differentthings you could do with images in HTML. With the advent of the new, improved, and updated HTML5 you can no longer do things like having a background image. That's what CSS is for. Now, you can only link to or embed images.
One of my favorite pictures I took with my DSLR is this one of an axe flying through the air during a town battle at Estrella War. I caught it completely by accident and it turns out it was thrown by a friend I rode down with. This image is an image link, which is just like any other link. It's just an anchored href that points to a picture on my hard drive and opens up in your browser when you click on it.
Here, I embedded the image into the page with an img tag. I was also able to adjust the height and width of the image as well as provide a snarky comment deriding any user who can't view the image if they are using a text browser like lynx or have images blocked.
I put the previous image in a separate paragraph from the text so the text began on the next line. Here, I did not. In some browsers, this text may appear beside the picture. In others, the first line will start at the bottom of the picture, beside it.