Solution.. For static images, like a company logo, you can simply use an image tag similar to the following in your S-Docs template source.

<image src=”http://publicsite/imagename.png” />

This may be the simplest approach if you are emailing HTML content or wish to embed an image pixel for email tracking. However, keep in mind that if this image is not stored in your Salesforce org or if the host server is not under your control, the linked image may change and therefore is not guaranteed to work.

You can also embed images that are stored as Salesforce documents.
1. Use the “Add Image” button on the template editor toolbar to open a menu for adding images into S-Docs.
2. Click "Browse Server" to search and add the desired image from your Salesforce documents folder.

Embedding Static Images (0)

If you intend to send a document externally that requires access to the image at view-time (e.g. HTML S-Doc), be sure that the Salesforce document record, which contains the image, is set for public visibility and copy the images full URL:
1. Check the "Externally Available Image" box to make the image visible on the public internet.
2. Right click the image itself and copy its full URL. In Google Chrome, you would right click the image and click "Copy image address". In Firefox, you would right click the image and click "Copy image location". In Internet Explorer, you would right click the image and click "Properties", and then copy the URL from the "Address (URL)" field in the following pop-up window.

Embedding Static Images (2)

You can now add this image into your template by clicking the "Add Image" button in the template editor and pasting the URL you copied into the URL field of the"Image Properties" window.

Embedding Static Images (3)

Note. For images that you need to have externally available, make sure you do not click the "Browse Server" button to select your image. If you do, the template editor will use the local path rather than the full path, and your image will not be available externally (even if "Externally Available Image" is checked). If you want this image to be visible externally (such as including it in an email sent to your customers), you must use the full path rather than the local path (e.g. you must use use https://c.na30.content.force.com/servlet/servlet.ImageServer?id=01536000001T3ZE&oid=00D36000000v29C&lastMod=1470659209000 rather than /servlet/servlet.ImageServer?id=01536000001T3ZE&id=00D36000000v29C&lastMod=147065920900) when referencing the image in your S-Docs template. This is why we copied the image's full URL and pasted it into the "URL" field of the "Image Properties" window in the steps above.