Can ArcView reproject the image files?
The current version of ArcView cannot reproject images. If you project the view, only the vector data will projected to the selected parameters. Reprojecting an image to match the current view properties each time it is displayed would be computationally taxing. A better approach would be to reproject the image to your desired projection once and use the reprojected file. See question 2.4 for some possible solutions.