An image in an HTML-formatted email message is not displayed in Outlook 2010 when you use a proxy server that is configured to use basic authentication

To resolve this issue, apply this following hotfix package:

2459116 Description of the Office 2010 hotfix package (mso-x-none.msp): December 14, 2010

Registry key information

Important This section, method, or task contains steps that tell you how to modify the registry. However, serious problems might occur if you modify the registry incorrectly. Therefore, make sure that you follow these steps carefully. For added protection, back up the registry before you modify it. Then, you can restore the registry if a problem occurs. For more information about how to back up and restore the registry, click the following article number to view the article in the Microsoft Knowledge Base:

322756 How to back up and restore the registry in Windows

After you install the hotfix package, follow these steps to enable the hotfix:

1. Click Start, click Run, type regedit in the Open box, and then click OK.
2. Locate and then select the following registry subkey:
   HKEY_CURRENT_USER\Software\Microsoft\Office\14.0\Common
3. On the Edit menu, point to New, and then click DWORD (32-bit) Value.
4. Type AllowImageProxyAuth, and then press Enter.
5. In the Details pane, right-click AllowImageProxyAuth, and then click Modify.
6. In the Value data box, type 1 or 2, and then click OK.
7. Exit Registry Editor.
   
   

• If you set the value to 1 in step 6, you are prompted for authentication one time per Outlook session in the scenario that is described in the "Symptoms" section. If you cancel the authentication request, you are not prompted again during that Outlook session. This option introduces a small volume of network overhead per Outlook session.
• If you set the value to 2 in step 6, you are prompted for authentication when it is required. Typically you are prompted for authentication one time per Outlook session. However, in some scenarios, you may be prompted multiple times. For example, if you cancel the authentication request for one image, you are prompted again for the next image that requires proxy authentication. This option introduces additional network overhead for each downloaded image. If an email message contains multiple images, the additional network overhead may cause slow performance in Outlook.
• If the value in step 6 is nonexistent, or if you set the value to 0, you are not prompted for authentication, and the image might not be displayed.