I've tried dragging images to the passages themselves, as well as the passage tree screen. The only outcome being displaying the image as though I've opened it in a new tab in a browser. If dragged to a passage, a wealth of strange characters appear, and if there's a way to somehow wrap them all into a line of code to display the image, I'm unaware of how. I've read that I can link images from websites, but most of the time spent working with Twine is done offline; so, that wouldn't really be feasible. Is there a solution that I'm overlooking or should I just bump down to 1.4.2?
If you use Twine 1 and plan to have more than 30-50 MB's of images in your story project then it is generally recommended to use externally stored images so you don't run out of memory when building a story HTML file. This issue may also effect the installable release of Twine 2.