Just ran into a request from one of colleagues on how to handle file attachments in Web Services.
Google pointed me this article on MSDN.
This uses DIME. DIME is now giving way to SOAP MTOM. http://www.w3.org/TR/2004/WD-soap12-mtom-20040608/
But as of now I believe the option is to go with DIME as WSE still doesn’t support MTOM.
Read this if need further background.
Another approach is outlined @