Hey Deb...thanks for this! You inspired me. I buy most of my books in mobi format cuz that is quickest to convert for my Kindle, but I do have some ereader files around.
Anyway, I figured there must be a way to mass convert but also keep the images. And I think I got it. At least, it worked on my machine.
As soon as I clean up my batch file code, I'll post about it.