Here is another request for the next client. In addition to fixing the problem with forwarding email with images, I would really like the option of attaching images as normal files without sending them to skydrive. Some recipients don't like having to deal with skydrive, and Microsoft doesn't need to be irritating potential customers. Maybe there could be a simple button to send images as normal attachments?
For others out there, my solution was to open a gmail account to forward images as attachments. (This could also solve the forwarding problem, but I'm not ready to totally dump Live Mail yet).