Just to expand niko's answer:
You can reference any image via its URL. No matter where it is, as long as it's accesible you can use it as the src. Example:
Relative location:
<img src="images/image.png">
The image is sought relative to the document's location. If your document is at http://example.com/site/document.html, then your images folder should be on the same directory where your document.html file is.
Absolute location:
<img src="/site/images/image.png">
<img src="http://example.com/site/images/image.png">
or
<img src="http://another-example.com/images/image.png">
In this case, your image will be sought from the document site's root, so, if your document.html is at http://example.com/site/document.html, the root would be at http://example.com/ (or it's respective directory on the server's filesystem, commonly www/). The first two examples are the same, since both point to the same host, Think of the first / as an alias for your server's root. In the second case, the image is located in another host, so you'd have to specify the complete URL of the image.
Regarding /, . and ..:
The / symbol will always return the root of a filesystem or site.
The single point ./ points to the same directory where you are.
And the double point ../ will point to the upper directory, or the one that contains the actual working directory.
So you can build relative routes using them.
Examples given the route http://example.com/dir/one/two/three/ and your calling document being inside three/:
"./pictures/image.png"
or just
"pictures/image.png"
Will try to find a directory named pictures inside http://example.com/dir/one/two/three/.
"../pictures/image.png"
Will try to find a directory named pictures inside http://example.com/dir/one/two/.
"/pictures/image.png"
Will try to find a directory named pictures directly at / or example.com (which are the same), on the same level as directory.