Correct, it should be done in HTML mode.
Assuming you have a VBO that is HTML-compliant and have it set to use it instead of plain-text, build your e-mail like you would a web page. You can get away with only keeping it within what would have otherwise been in the tags. Please note that since this is HTML, the image is expected to be on a server accessible by your recipient, rather than an attached file.
Ex:
This is text. Please refer to the screenshot below.