In the past Gmail has hidden images in email messages by default. If a user wanted to see images contained within a message, they had to click "display images below" to get them to show up.
This policy is still in place for messages from unknown recipients, but now images will automatically be displayed if they come from a contact. More specifically, if you have emailed a person at least twice, you will see images from them without having to click the "display images below" link.
Google does note that while 2 messages are currently required for images to display, they may change this in the future if the number doesn't "seem right."
It is possible that you like Gmail's non-image-displaying just fine. You can keep it this way if you go to "external content" on the general settings tab and select "ask before displaying external content." You can also disable images on an individual sender basis by clicking "don't display from now on" under the "show details" link in an email that contains images.
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