If email template is viewed from REM site Email Templates list, the images are displayed with no problem. But when a user receives this email notification the images are not shown:
If you right click the email notification and select ‘View source’ you see an absolute valid link e.g. http://yourdomain/images/image.jpg. However, when you open this link in the browser you’re required to authenticate.
It seems that Outlook can't bypass authentication so images should be publicly accessible. This means it'll work if you enable anonymous access for sharepoint web application, and give anonymous users permission to view items in the image library.