> Now with the full path we are placing even more information in the lyx file > than before.
This assertion, 'placing even more information in the lyx file than before', is plain wrong. Embeding is not placing *more* information in the lyx file. It places the *same* information in the .lyx file as before regarding the filepath issue. If you place filename.png in .lyx file before, filename.png is used now. If you place /path/to/filename in .lyx file before, /path/to/filename is used now. I understand that this is a problem, but it is *not* a problem with embedding. This is my basic understanding of the issue. Cheers, Bo