I agree that blob type is needed. But I believe that each time your web visitor views the image, it will be read and downloaded from the db. I have IE6.0 and it doesn't seem to cache the image(s), making for a page re-load that is slower than if the images were stored in files on the server. Depending on the size and number of images on a page, that may or may not be an issue.
Please correct me if I'm wrong, but that's what I've noticed.