This question may be related to a resolved thread.
I am running the Discussion Forum 2.1.2. I am able to use the [IMG} tag to display images in-line, but I needed to set the following:
Text Formatting in Posts: XHTML
HTML Formatting in Posts: Allow only safe HTML
Auto-convert URLs and email addresses into links?: Yes
Allow Image Hot linking?: Yes
There appears to be a bug (or maybe it’s part of the Safe HTML or XHTML formatting):
If the URL used in the [IMG] tag contains %2O in it, the %2O is converted to a space when the post is saved. The URL that is created when the post is displayed ends at the space, so the image is not displayed correctly. See this post:
http://www.btbff.com/index.php/btbff/RunForum/viewthread/473/
I guess this would apply to any character entities that included in a URL?