the html source that php is creating isn't correct:
<p align="center"><img src="tattoo/"></p>
if you notice the file to display isn't in the img src tag.
in php the line should be something like this:
<p align="center"><img src="tattoo/$file"></p>
picdisplay.php is actually a text file but windows doesn't know that. to open the file do a single left click on the file, hold down the shift key and right click on the file. now choose "open with" and select something like wordpad. now copy the text and paste it here so we can look at it.