In SharePoint 2010 it’s possible to insert a picture from SharePoint into a Content Editor Web Part.  However, on a certain page on our site the “Insert Picture From SharePoint” option was grayed out.

The option is dependent on the content type of the page you’re working on.  The content type of the page needs to include a “Publishing HTML” page content field.  As a work around I used the “Insert Picture From address” option.