Can confirm what Harry states above. What I meant with my statement about adding the pictures manually was meant a little differently, though:
When I import an HTML file (from some directory) with linked pictures (in same directory or subfolder) I experienced the problem that the HTML was copied to the Creator working directory but not the pictures. That way when I built the book I would not see the pictures in Mobipocket Reader but instead get an error message that the picture could not be found (on the Cybook I would not get any errors, obviously, but when trying to display the picture it would either just omit the picture or crash.
After some fiddling I found out that the HTML is parsed correctly and the references to the pictures were embedded correctly only the fact that the pictures were not present in the working directory when building the book prevented them from being there. This can be remedied by just copying the pictures manually into the Creator working directory of the current book (=where the HTML is located) after all the settings and editing in Creator are done and *before* pressing the "Build" button.
Adding the files from within Creator (i.e. via "Add file") will copy the file to the working directory also but - as Harry mentioned - that would give you a double. I experienced this when importing an HTML which had the cover embedded as a picture at the top. After adding the cover image in Creator (via the menu) I had the cover image two times at the beginning of the book. I had to remove the <img src=...> tag from the HTML before importing to get rid of the double.