Is there any way to make this come through as a better looking HTML email without the clutter of these .JPG file attachments? Thanks...
This is a function of your email client and not of how the report is generated or delivered. Because the image files are included in the email and aren't reference links to images hosted on a web server your email client is interpreting them as attachments. In the next release of Orion NPM you'll have the option of emailing these reports as PDF files. Would this resolve your issue?
For more information on 10.1 see the PM blog post located at the link below.
Do you think if I installed Outlook 2003 on this Orion server then it would be a workaround for the email client you've mentioned?
No. Installing Outlook 2003 on the Orion server will not change how how the reports are sent or how the reports appear. Different email clients handle image attachments differently so you may find that the attachment handling in Thunderbird differs from that of Outlook, or Eudora.