I had a similar problem a few years ago while running 98SE.
It should be the same in XP:
In Windows Explorer go to TOOLS -----> Folder Options... Click on the tab: File Types
Scroll down to Jpeg and find out if it is recognized. You want to edit the file type and set the default action to open in whatever viewer you want... mine is set to open Faststone image viewer...
I think that is what you are talking about.... because it is not a problem with your email.. you can view it in the email and save it.. you just cannot open the jpeg image while in explorer etc..
What program are you using to open the JPEG? try opening it in paint, (any imaging editing program you have(photoshop)), internet explorer, and see if it opens in them.
Hey SFR i would send you a PM but i dunno how to attach a file...I have tried picture and fax vieewer, paint, adobe photoshop and even Internet explorer...Ahhh