How to insert an embedded picture?

you can use the shapes.addpicture method

activesheet.Shapes.AddPicture Filename:="C:\test\desert.jpg", linktofile:=msoFalse, _
            savewithdocument:=msoCTrue, Left:=0, Top:=0, Width:=100, Height:=100

Note that you can set the required Width and Height parameters to -1, which then maintains the height and width of the original image!

Activesheet.Shapes.AddPicture Filename:="C:\image.jpg", LinkToFile:=msoFalse, _
        SaveWithDocument:=msoTrue, Left:=0, Top:=0, Width:=-1, Height:=-1

http://excelmatters.com/2013/11/25/default-picture-size-with-shapes-addpicture/

(Added as another answer to increase visibility as I've struggled with this problem for ages and haven't found this solution documented anywhere else.)