New in WordPress 2.9: Post Thumbnail Images « Mark on WordPress. Many WordPress themes, especially those with “magazine-like” layouts, use an image to represent each post. It might just be on the front page. It might be alone, or alongside an excerpt. Until now, there was no standardized way to do this. Many themes would require you to tediously enter a Custom Field with the value being the URL you wanted to use. Often you had to do cropping yourself. YUI Image Uploader works with YUI 2.8.1. Just throught I would pass this along too.
In all of the examples so far the assumption is that your server side script that receives the file is storing it on your website and returning the URL to access the image. If you don’t want to store the file on your server you can use the data: URI format to keep the image completely in the email and WYSWIG editor — so no need to store the file on your server at all.
Information on the data: type of URL is here: