This problem is most commonly associated with not cleaning out your temporary internet files (TIF's) periodically.
To do that, open Control Panel>>Internet Options>>General tab.
Click the "Delete Files" button. On the dialogue box that pops up, place a check in "Delete All Offline Content" then click "OK".

  Hint: In a pinch I have been known to right-click on the image and Email it to myself.  It will be sent in the proper format.

If that doesn't help check your settings herC: Go to Start/Run/Regedit and navigate to this key:

HKEY_CLASSES_ROOT\.jpg.   For Content Type, it should read image/jpeg.
HKEY_CLASSES_ROOT\.jpeg  For content Type, it should read: image/jpeg.
HKEY_CLASSES_ROOT\.gif     For Content Type is should read image/gif.

NOTC: If you are using AOL: This behavior may occur when AOL's graphic compression option is turned on. When this option is on, the images are saved as the .art file type.

Connect to the Internet through AOL, and then visit the following AOL Web sitC: www.aol.com. Click My AOL. On the Settings menu, click Preferences. In the Preferences dialog box, click Internet Options (WWW). In the Internet Options dialog box, click to clear the Always Compress Graphics dialog box. Click to select the Never Compress Graphics dialog box. Click Apply, and then click OK.