Half a year ago, I would've pumped my fist and screamed "Hell yes". That was the biggest feature I've missed in Outlook.
However, Gmail has been so excruciatingly slow that a month ago, I've switched back to Outlook (Outlook for Mac 2011), and haven't looked back since. It feels really good to use an email client again that responds to what I do instantenously. Web email clients still have a way to go.
This is interesting. Are you using Firefox by any chance? I was incredibly frustrated with Gmail speed on Firefox for a couple of years, but after switching to Chrome haven't seen a problem on any of my boxes.
Here's the one thing about Gmail that drives me nuts: It doesn't let you preview its line wrapping. This is terrible when you're including bits of code in an email. How hard could it be? You could even pull it off half-decently with Greasemonkey.
I can't test this now, but I remember trying it many times in Firefox, and every time I'd get a little icon that showed a little broken image. It was only after the Firefox 4 upgrade, that it started working (well in gmail's case, kind of working).
Having looked into what gets sent, it is definitely a Firefox thing, but for me, it only started doing it with 4.0, so hence this post.
I just posted an update with some findings - basically, those "3D" and =\r\n characters that something is adding (somewhere in Gmail) are messing everything up. We're this close to a working version of this...
That is actually a correct way of creating an image inline and should work, but Gmail or something in Firefox is adding extra characters into the mix and messing everything up. See the update in the article.
Here's some interesting observations, this will work on any document that is in designMode or any element that has contenteditable attribute.