I am starting to depend heavily on the IPython notebook app to develop and document algorithms. It is awesome; but there is something that seems like it should be possible,
Getting an image into Jupyter NB is a much simpler operation than most people have alluded to here.
1) Simply create an empty Markdown cell. 2) Then drag-and-drop the image file into the empty Markdown cell.
The Markdown code that will insert the image then appears.
For example, a string shown highlighted in gray below will appear in the Jupyter cell:

3) Then execute the Markdown cell by hitting Shift-Enter. The Jupyter server will then insert the image, and the image will then appear.
I am running Jupyter notebook server is: 5.7.4 with Python 3.7.0 on Windows 7.
This is so simple !!