How to send html mail in case subscribing to newsletter?

[pralay]

Hi,
I want to send a html mailer to subscriber of the newslwtter. Now I have the template of the mailer.
I just coied it and paste in the emailsection of newsletter and replaced the body of themailer with the original body given there.

But it's not working and in yahoo it comes with a lot of smarty error.
I used css written on the mail template itself inside the head tag.
Then I used {literal}{/literal} to cover up the whole html without the content.
then the smarty error is gone, But the iamge src which are given as absolute url are not coming and the template is distorted.
when I view the source I saw
has been replaced like

http://testurl" width="1"
height="32">

Now what to do..please help.