Nick, image files are not base64 encoded in normal HTTP transmissions. Mail messages with MIME attachments are a completely different animal.
Example for a random 1x1 pixel image on yahoo.com; the image data is on the last line and the "GIF89a" header present in any gif image is clearly visible, unencoded.
root@zygot:~# telnet l.yimg.com 80
Trying 98.137.80.49...
Connected to fo-anyycs-l.ay1.b.yahoodns.net.
Escape character is '^]'.
GET /a/i/mntl/ww/events/p.gif HTTP/1.0
Host: l.yimg.com
HTTP/1.0 200 OK
Date: Wed, 25 Apr 2012 19:02:39 GMT
Cache-Control: max-age=315360000
Expires: Sat, 23 Apr 2022 19:02:39 GMT
Last-Modified: Tue, 05 Oct 2010 18:34:21 GMT
Accept-Ranges: bytes
Content-Length: 43
Content-Type: image/gif
Age: 14636
Server: YTS/1.20.14
GIF89aÀÀÀ!ù,D;