What happens with Gmail is that it replaces the " " (space) with a
"+".
Neither hotmail nor yahoo have this problem (ahem).... :)

Now, i know the solution would be "well just don't use spaces in the
image filenames".
But this isn't always possible in a large organisation with many
people producing graphical content and occasionally an image with a
space in it's filename gets through the net. This can mess up our
marketing emails and make us look bad to all the gmail customers.... :
(

So it would be great if google could fix this problem. I don't think
it would take very long to fix and i would say it's definitely a bug
as even if i replace the space character with a %20 it still doesn't
display the image correctly because it replaces the "%20" with a "+".

Please fix it google!!

I thank you :)