Works OK for me with SW2010-S0.
Can you list the steps you used to insert the image?
Your trying to import a TIF file but the attachement is a JPEG.
1.) Did you convert it to TIF before you tried to import it?
2.) Try "Insert, Picture and Browse" to the picture or try 'Insert, Object and Browse to the object" once you've imported the object you can send it back by right clicking on it and selecting the "Send To Back" option.
There are different versions of tiff that can be outputted from programs like Photoshop that are, unfortunately not supported by SW (and other programs too.) For instance, although .tiff is a lossless format, it can be saved with optional compression (zip) and this format is not compatible with sketch picture. So wherever it came from, it's likely that it was saved this way. Fortunately, MS Paint is pretty good in reading many formats so try opening it in Paint and then re-saving it as tiff, png or jpeg as Geoffrey suggests.
Tiffs save in there standard format (no compression) should be compatible with SW.
It's an old thread I know but if you have the same problem:
Do not use "Insert" "Picture" but "Sketch Picture" from "Sketch Tools" and your problem is solved