Bunny, Dixie, Tried spongebob squarefree and everything did what it should even to the point of blueing out the images and dragging it across with the correct symbols next to the cursor, but no image appears on the reply screen.

Are you using Firefox Dunno?

I noticed you said about 'Blueing/highlighting out image' [IE behaviour]

On my Firefox it 'Greys out'

Will not work in IE...I just tried it 😉