I thought about this on the way home and realized I should have been more
specific. Ideally this would be visible in the DispForm.aspx page of a list.
This is for a contact list, but the contacts do not all work at our company
which is why we don't want to use profile images. I hope this helps clarify
things a little.

Try customizing an Image Library, which has a
thumbnail view  built-in. You may need to customize a
view, too.

I had thought of that, but unfortunately that won't work as not all of our
contacts have photos yet. Basically what I am looking for is a way to attach  a
photo to a contact without it having to be a link. The 3 girls who will be
updating contact information aren't very tech savvy. I'm trying to make it as
easy as possible for them. If it can't be done it can't be done. But
SharePoint gets me a drink every morning, I don't see why I wouldn't be able to
do this.

While there may be other approaches, a Custom Field Type could certainly
do what you are asking for.

I'm not sure this will work for me, as I don't have VS.

I did find another option, but I'm not sure how to edit the webpart to make it
useful for us. There is a field called "Page Icon" that seems that it would
work perfectly for what we need. The downside is that it can only select images
from document libraries already in SharePoint. (I can use this and make it
work.) I would really like the ability to be able to select from a folder on a
local machine or a network shared drive in addition to document libraries on the
site. If this isn't possible I will work with what I have.