I have no idea if this guy is serious, (EDIT: I submitted this before I saw his response) but it's entirely possible to embed data in JPEG files via base64 + modifying exif data. It isn't really viable for large files, however, unless vastly distributed. Perl:

  use Image::img;

  my $img = new Image::img;

  $img->ExtractInfo('image.jpg');
  #$img->SetNewValue("UserComment", $yourdata);
  #$img->SetNewValue("Comment", $yourdata);
  $img->WriteInfo('image.jpg');