Sure, just not with 4MB images.

It can help you get around the file size limitations here yes, but since it's embedded it auto-loads every time someone loads the thread, even if they don't actually want to see the image (say they've already seen it for example). So in a discussion thread where an image like that is posted in say the 1st post, whenever someone views or responds to that thread from the 1st page, they'll load that image automatically. Rather inefficient.
- Oshyan