Images in Excerpts?

I want my front page to display only the excerpts of the posts along with any images that are in the top of the post, then the reader can click on a link to read more, getting the full post on a page. The problem is that I can’t get any images to show up using the excerpt code, I also can’t get the read more to show up. I know there are 2 different ways to do this (excerpt and more) is there a way to combine the two of them and include images?