Is it possible to paste PICTURES (JPEG/PNG/BMP etc) as part of NOTES ?
As far as I know, it isn't. Links are supported, so you could at least include links to images if they are hosted online.
Also I see FORMAT is getting changed whenever any TEXT is pasted from EMAILs.
Is it possible to retain the FORMAT as it is ?
Regular Copy/Paste from email will not retain formatting in HTML to my knowledge. There are ways to do it (I use the Hyperwords Firefox addon), but it still won't be ideal because only some HTML is supported(see here <http://www.toodledo.com/info/help.php?search=formatting> ). So you will likely have some HTML tags that do not get read and just show up as text in your note.
I Think at least the images should go down as a feature request. I had not thought of that, but it would be nice to have. In addition, it would provide an obvious point of integration for Evernote, the program everyone wants to work with Toodledo, but no one knows how.