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The HTML of the ebook should reference all these images as relative URL's that include the path to the image files. If it is set up like that the images will show up in the browser and will also be pulled in when you add the HTML file to Calibre. It will then show up when you convert to other ebook formats
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Thank you. After I posted I worked with it a bit more. I got rid of all the versions I had attempted and started fresh. When I open the .html file from the RAR archive, the images ARE there (when viewed in internet explorer). There is no cover image in the .html version, but all the other images are in the document.
When I add the .html to Calibre the images ARE there when its still a .html file. However, if I convert it to a .EPub or .MOBI file then the images disappera and are replaced by a blue box with a white question mark in the center of it.
Why do the images appear in the .html but are only displayed as a box with a question mark in it once converted?