1. modifying user content (html)*
2. storing content (not metadata) beyond the scope of email clients
In a nutshell, they give recipients 2 options A) show images immediately, B) ask before showing images. In both cases, images are fetched from source and stored on google servers. What the recipient sees is a modified version of the message where the IMG urls are replaced to point to google servers.
The bottom line is that Google broke the Internet (since we're talking about gmail web client.) The Internet grows everyday with new patterns building on simple foundations like IMG tag referencing a URL. Modern browsers, including Google's Chrome now accept IMG urls that point to svg files. That's progress. Gmail breaks svg (in img) and who knows what else. That's narrow-mindedness or just unclear on a concept.
http://www.wired.com/2013/12/turn-gmail-auto-image-loading-off/
http://stackoverflow.com/questions/20903967/gmails-new-image-caching-is-breaking-image-links-in-newsletter/25069148#25069148
http://lifehacker.com/disable-automatic-image-loading-in-gmail-to-save-data-a-1482522063
*authenticity issue will be discussed in another post
