More update news from Google:

You can now upload images from your computer, the web, or your Picasa Web Albums into (eduBuzz)Google Spreadsheets.

How to access what’s new:
Select ‘Image’ from the ‘Insert’ menu in any Spreadsheet.

For more information:
http://googledocs.blogspot.com/2011/04/upload-images-in-google-spreadsheets.html