Index: includes/insert.inc
===================================================================
RCS file: /cvs/drupal-contrib/contributions/modules/insert/includes/insert.inc,v
retrieving revision 1.1
diff -u -r1.1 insert.inc
--- includes/insert.inc	21 Oct 2009 06:23:43 -0000	1.1
+++ includes/insert.inc	8 Jan 2010 18:55:47 -0000
@@ -42,7 +42,7 @@
  * Preprocess variables for the insert-image.tpl.php file.
  */
 function template_preprocess_insert_image(&$vars) {
-  $vars['url'] = file_create_url($vars['item']['filepath']);
+  $vars['url'] = insert_create_url($vars['item']['filepath']);
   $vars['class'] = !empty($vars['widget']['insert_class']) ? $vars['widget']['insert_class'] : '';
   $image_info = @image_get_info($vars['item']['filepath']);
   $vars['width'] = isset($image_info['width']) ? $image_info['width'] : '';
@@ -53,7 +53,7 @@
  * Preprocess variables for the insert-link.tpl.php file.
  */
 function template_preprocess_insert_link(&$vars) {
-  $vars['url'] = file_create_url($vars['item']['filepath']);
+  $vars['url'] = insert_create_url($vars['item']['filepath']);
   $vars['class'] = !empty($vars['widget']['insert_class']) ? $vars['widget']['insert_class'] : '';
   $vars['name'] = $vars['item']['filename'];
 }
Index: includes/imagecache.inc
===================================================================
RCS file: /cvs/drupal-contrib/contributions/modules/insert/includes/imagecache.inc,v
retrieving revision 1.1
diff -u -r1.1 imagecache.inc
--- includes/imagecache.inc	21 Oct 2009 06:23:43 -0000	1.1
+++ includes/imagecache.inc	8 Jan 2010 18:55:47 -0000
@@ -32,7 +32,7 @@
  * Theme the content that will be inserted for ImageCache presets.
  */
 function template_preprocess_imagecache_insert_image(&$vars) {
-  $vars['filepath'] = $vars['item']['filepath'];
-  $vars['url'] = imagecache_create_url($vars['preset_name'], $vars['item']['filepath']);
+  $vars['filepath'] = imagecache_create_path($vars['preset_name'], $vars['item']['filepath']);
+  $vars['url'] = insert_create_url($vars['filepath']);
   $vars['class'] = !empty($vars['widget']['insert_class']) ? $vars['widget']['insert_class'] : '';
 }
Index: insert.module
===================================================================
RCS file: /cvs/drupal-contrib/contributions/modules/insert/insert.module,v
retrieving revision 1.1
diff -u -r1.1 insert.module
--- insert.module	21 Oct 2009 06:23:43 -0000	1.1
+++ insert.module	8 Jan 2010 18:55:47 -0000
@@ -308,6 +308,34 @@
 }
 
 /**
+ * Utility function to create a URL for Insert.
+ *
+ * This is modeled after file_create_url(), but with the modification that it
+ * will consistently use absolute or relative URLs, depending on the Insert
+ * setting.
+ */
+function insert_create_url($path) {
+  // Strip file_directory_path from $path. We only include relative paths in urls.
+  if (strpos($path, file_directory_path() .'/') === 0) {
+    $path = trim(substr($path, strlen(file_directory_path())), '\\/');
+  }
+
+  // This variable has no configuration location. It may be set by placing
+  // $conf['insert_absolute_paths'] = FALSE;
+  // in the site settings.php file, or by manually running variable_set().
+  // For reasons why this might not do what you want and why there's no UI
+  // see http://drupal.org/node/640352.
+  $absolute = variable_get('insert_absolute_paths', TRUE);
+
+  switch (variable_get('file_downloads', FILE_DOWNLOADS_PUBLIC)) {
+    case FILE_DOWNLOADS_PUBLIC:
+      return ($absolute ? $GLOBALS['base_url'] . '/' : $GLOBALS['base_path']) . file_directory_path() . '/' . str_replace('\\', '/', $path);
+    case FILE_DOWNLOADS_PRIVATE:
+      return url('system/files/' . $path, array('absolute' => $absolute));
+  }
+}
+
+/**
  * Preprocess variables for the insert-widget.tpl.php file.
  */
 function template_preprocess_insert_widget(&$vars) {