Adding images to viewlet portlet

Hi Julie

Reply below:

>> How is the "Insert Image" capability recommended to be used?

The image must be specified via a URL.
The description is optional.

>> Is it possible to use an image that is saved as a gif?

Yes.
e.g.
http://www.google.ca/intl/en_ca/images/logo.gif
Any image format that the browser can render is supported.
e.g. jpeg, png, gif, etc.
http://en.wikipedia.org/wiki/Comparison_of_web_browsers#Image_format_support

>> Does it really insert an image or only link to an image

It only adds a link to the image using HTML mark-up.
e.g.
<img src="http://www.google.ca/intl/en_ca/images/logo.gif" />
So essentially the image source can reside on another server.

HTH,