I'd like to embed images into my running org file -- for eventual conversion to Latex or html. These would be simple diagram-style pictures such as math or technical diagrams that cannot be done with gnuplot or other formula-to-picture conversion software. 

Examples:
http://www.library.utoronto.ca/see/SEED/Vol5-1/Queiroz_Emmeche_El-Hani_files/image003.gif
http://math.ucr.edu/home/baez/irvine/SBGN_process_description_cropped.jpg

I know emacs can draw some things, but I'd probably need better renditions. So how does emacs/org handle such images and what sort of software (I'm on Ubuntu) is available for making such drawings and diagrams? What about software like "Processing"? Having Processing code embedded that then produced images would be great.

Borgauf