I totally agree with the points raised by Eric, adding my points that with copy/paste of image date (not a file name or href) then it would be dangerous to create a new file instead of embedding (user does not know what is being done). also the options in Erics post to do with changing between linked and embedded would take care of anyone who wants to paste linked images, handing the option to the user is always more useful, although I suspect most linkers would want to select the file or D&D it.

As for copy/paste filename that should be handled as a link leaving the option to embed to the image properties.

Drag and Drop should work the same as the OS, so embed normally, link when [ctrl] is held down (or how ever the os deals with it) perhaps changing the icon to show the diference.

Information should be provided so when an image is selected it should say on the status bar: Relative/Direct Linked Image: [href/dir] or Embedded Image: [size] [type].

These are points to consider when improving the user interaction with external images.

Best Regards, Martin Owens

PS. Appologies for all the emails I've sent out directly instead of to the list