ok so I went with PHPmailer - though I had to use the PHP4 version cos the site is still on a 4.9.9 hosting!!!!!
for info, this is the code I used to send a mail with an inline image
<?PHP
$to = 'mail1@gmail.com';
$subject = 'PHP inline image test';
$from = 'me@hotmail.com';
$message = "Hi! \n\n This is my first e-mail sent through PHPMailer.";
$from_name = "John Smith";
$image_name = "myLovelyImage.jpg";
$image_path = "images/";
$image_id = "myimg";
include_once('PHPMailer204/class.phpmailer.php');
$mail = new PHPMailer(); // defaults to using php "mail()"
$mail->From = $from;
$mail->FromName = $from_name;
$mail->Subject = $subject;
#$mail->AltBody = "To view the message, please use an HTML compatible email viewer!"; // optional, comment out and test
$mail->MsgHTML($message);
$mail->AddAddress($to);
$mail->IsHTML(true);
$mail->AddEmbeddedImage($image_path.$image_name, $image_id, $image_name); // embed file, and later link to it using identfier myimg
$mail->Body = "<h1>Test image in a mail</h1>
<p>This text should be before the image<br /> <img src=\"cid:".$image_id."\" /></p>
<p>This text should be after the image</p>";
if(!$mail->Send()) {
echo "Mailer Error: " . $mail->ErrorInfo . " ".date("H : i");
} else {
echo "Message sent! ".date("H : i");
}
?>