Vista - new message window uploading photos error message

I have the latest version of windows live mail which has a very useful "add
photos" function in the new mail window Clicking on it allows selection of
photos for attachment and a sidebar allow you to select file sizes and assess
download times.A decent sized image also appears in new window message area
with features to change appearance frames etc
However when I select "send" an error message as follows appears "Sorry we
couldn't uploed photos, recipients will see the small photos shown on this
message but they wont have access to high resolution versions of your photos
that they can view online or save" I have seen earlier advice on using
Picassa 3 but I would like to use this feature in Windows live mail as i
spend much of my time with this open already
Please can someone tell me why I cannot send photos using this feature. I am
using Windows XP is it possible it only works with Vista
many thanks
--
Peter