If you want to add the contents of an HTML file on your machine to an Outlook email inline (rather than as an attachment), you have a couple of options. You could browse to the file, open it in your browser, copy the contents and paste it into an email body and cross your fingers that the browser you're using puts things on the clipboard correctly (one browser in particular always used to annoy me by interpreting the end of lines in the current window width as line breaks in a copy, although that was years ago)... or you could insert the file directly:
1. Open a new HTML message 2. Insert | File 3. Browse to the HTML file you want to insert 4. Click the down arrow next to the Insert button and choose "As Text"
You can also use this to add the contents of a text file to a message rather than attaching it, for example.