Using views_embed_views() to generate content for an email message. How can I get it to insert images and urls correctly for this purpose?
Use hook_mail and drupal_mail to send out e-mail. drupal_mail at the place you want to send to mail, eg. hook_cron. And hook_mail to set the content. Use drupal_mail to send parameters to hook_mail.

As for the images, make sure that you use absolute url's in views (setting on the image field).