I always get messages from PC users that a JPG file I sent in an email is embedded and they can’t save it. <em>Mac people have no such problem.</em>
I don’t know why Outlook works this way, but there are easy workarounds to this problem.
Option #A: <em>(Recommended for multiple images)</em> Open the email message and save it as an HTML file (File > Save As > Web page). This will save all the embedded pictures in one folder. (It’s the same trick that’s often used to extract pictures from PowerPoint slideshows.) Also recommended when you want to download multiple images from the same email.
Option #B: <em>(Quick and easy for one image)</em> Open the email message. Under the ‘Message’ tab, select ‘Other Actions’ > ‘View in Browser’ This will open your mail inside your default web browser as a regular HTML web page. You can then simply right-click and save the embedded picture. This may or may not work with your version of Outlook.
You can also copy the image to the clipboard and paste it into a photo editing tool like Paint or Photoshop. This is the least recommend way of saving the image.