Hey Herb,
It sounds like you are referring to editing an email in the MKTO editor and trying to drag images from the web into your email. Please disregard the following if the assumption above is incorrect.
The way most images are embeded in email using MKTO is by use of the Design Studio's Images and Files section. You can upload any image or file that you want into the Images and Files section, and MKTO will give you a unique URL that you can used to reference the image or file in your email. After your image is uploaded and you have this link, you can go into your email editor into an mktEditable section and click the Insert Image button. MKTO will then prompt you for an Image URL, which is the URL MKTO just gave you for the hosted image. Files work the same. Let's pretend that you have a PDF that should be sent out with an email. You can upload the PDF as I mentioned and in your email editor, highlight a section of text you want to hyperlink to your PDF. MKTO will ask you for a URL and you can insert the URL MKTO created for this uploaded file. Then when someone clicks this link in your email, the PDF will download onto their machine.
Let me know if you have any questions.
Sincerely,
Keith Nyberg