Depends on what you mean when you say RSS. Many people use this term to describe all kinds of feeds. If you really mean RSS 2.0, images are not technically supported on individual items (though they are supported on the channel). However, typically the "description" element of an item is XML-encoded HTML, and most folks include "img" tags along with their text to get images into their individual items.
The RSS 2.0 spec is well defined here: RSS 2.0 Specification (RSS 2.0 at Harvard Law) (Don't ask me why it belongs to Harvard Law.)
With Atom, the story is essentially the same, except that you'll put your HTML in either your "summary" or your "content" (or both) sub- elements of your entry elements. Atom also supports something called an "enclosure", but that's typically not used to embed images, it's used to provide a link to any type of media.
The Atom spec can be found here: http://atompub.org/rfc4287.html
But to make this long story short: Use HTML with IMG tags in your
description/summary/content. 