<img src='images/wcimage.gif'>
Relative paths will work for all scenarios:
Note that the Microsoft Help Compiler will embed images into a Help project only if the path is relative. If you reference an image like this: c:\http\images where this path is not relative, the image will be treated as an external reference and not embedded into the help file.
It's recommended that you copy all images you plan on using into the Images (or other relative) directory under the project root path. The image picker dialog will automatically detect a relative path and strip off the common project path.