By using data: URLs you reduce the number of HTTP requests needed to display your page since the images are part of the page itself. This does mean though that the images can't be cached (unless of course the page itself is cached). But, if you were to reuse the same image on subsequent pages, they wouldn't be cached. You can get around this though by using some Javascript at the bottom of your page to change the URLs to the real image files. The www.rgraph.net front page uses this technique.
URL: The data: url: A full image tag with the url as the src:The image itself using the data: url: