Inline Images on Web Pages
Firstly, it would give us some more control over the presentation of our ideas. When I put up a desk calculator, I want all of the button images to display at once. I don't want my users watching an unscripted animation as the images are one by one stitched over the skeleton of my page. I don't want them looking at skeletons at all, I want them to see the complete web page.
Secondly, it would give us more flexibility. If my client side script needs a particular image, there's no reason why I should have to make a roundtrip to Timbuktu for a precomputed image or so a server side program can generate the image. I can draw it on the client side so I should be able to insert it into the page.
And eventually these issues will go away. The W3 has a proposed Scalable Vector Graphics standard, SVG, which will make for some very spiffy client side graphics if anyone ever implements it.
The document.open(mimeType) method appears to support the following way of replacing a document with a computed image.
Both Goodman  and Flanagan  discuss this as if it works. Unfortunately, the document.write() method in NN4+ truncates its data at the first ascii NUL character. It's reported that this worked in NN3, but I haven't confirmed that.
And even if it did work, it would be a less than ideal solution since it would require inline images to exist in layers which could be written into. This would limit its use to browsers with DHTML support and its usefulness to pages which were written in a particular way.
The data url format allows the value of a small object to be encoded inline as base64 content. This looks like this:
where the [...] is replaced with the base64 encoded image data. Since the content of an html element is limited, in worst case, to 1024 bytes, only fairly small images could be displayed this way. (I'm not sure where my memory of this limit comes from.)
Another annoyance is that NN4+ only partially supports
data URLs. A data URL may appear in HTML source, but if