I have re-downloaded latest Xoops and have tested them outside Xoops to be sure.
Check for yourself by using this simple html and open it in your browser:
<html>
<body bgcolor="#000000">
<img src="http://127.0.0.1/xoops/uploads/smilies/smil3dbd4d4e4c4f2.gif">
</body>
</html>
Of course change the link to the image.