Images in excerpt

I use excerpts in my index.php instead of contents, with that script:
<?php
if ($single)
the_content();
else{
the_excerpt();
?>
” rel=”bookmark” title=”Permanent Link: <?php the_title(); ?>”>Read More…
<?php
}
?>
Is there a way to make excerpts include automatically post images?
Automatic excerpts actually strips images from the post.
Another question: is it possibile to show a link to “Read More” only when excepts are different from the post content, i.e. when the content is a long post and excerpts cut it?
I’m using a wordpress snapshot 15/12/2004