Loading the image in the page will be slower up front (larger html file), but faster overall (fewer requests to the server). Note that IE7 and lower have no support for this, and IE8 doesn't support images over 32k. (Source) Encoding in base64 also increases the image size by 1/3. (Source)
In my opinion, it makes sense for icons in CSS files, occasional small thumbnails, etc. But several large images should be loaded from normally.