Update on this:
When I click view source on the php page the <img src="C:/wamp/www/images/image.jpg" /> is there.
Firefox doesn't show anything, but right click view source shows the tag there. When I type the whole C:/wamp/www/images/image.jpg to the url box in firefox it says firefox doesn't know how to open the file because the protocal isn't associated with any programs.
On IE when I type the filepath on the url box it shows the image no problem. When I use IE to view the php page I get empty boxes without the picture. When I save the source file as a html file, everything shows fine in IE but still not firefox.
Any inputs? This is tested using wampserver2 and on windows vista.