This is from Gmail's blog:
They say a picture is worth a thousand words, and people certainly like to spice up their emails with images. A while back, Gmail started making this easier by letting you drop images from your desktop right into the compose window. Now, when you’re running the latest version of Google Chrome, you can paste images right from your clipboard too. So if you copy an image from the web or another email, you can paste it right into your message. This is especially handy for passing around screenshots — you don’t have to save the files any more (I’ve been using Command-Control-Shift-4 on my Mac to save screenshots directly to the clipboard). While this currently only works in Chrome, we hope to enable it on other browsers soon.