Your friend does not see the pictures because the pictures either need to be on his computer as well, or the pictures need to be uploaded on the internet.
You can take out the path in the code like, C:
\Users\someone\Pictures\picture.jpg and keep the code to simply
<img src="picture.jpg">
Using that code with just picture.jpg would require the picture to be in the same folder as the .html file.
Or you can upload it to the internet and you wouldn't need to send him the pictures at all, you would just have to put in the link to the picture.
So it will look something like:
<img src="http://something.com/picture.jpg">
Some free easy places to upload pictures are:
http://www.imageshack.us
http://www.tinypic.com