mail.app missing plug-in
I just had a similar problem and solved it by going to:

System Preferences &gt; Java &gt; Security


and set the security level down to medium.

However I don't find this a very satisfying solution and I wonder why Mail requires Java to display images...

Update:

I assume it actually has nothing to do with Java itself but in some way with the plug-in loading. Maybe changing Java settings does something with the internet plugins... After all, now that my images do appear again, it has no further effect to change the java settings. The images will be displayed regardless of the java security settings. (So I set them back to high)

Maybe another solution is to have the privileges repaired or internet caches cleaned up...