I have solved this following the recommendation in an earlier post: http://www.webassist.com/forums/posts.php?id=36722
Here's what I did:
1) Set up the mySQLi recordset (rsTestRecord) in the page that triggers the Universal Email server behaviour
2) Added a global variable in my template page, using this code at the top of the page:
<?php global $rsTestRecord; ?>
3) I can now display any dynamic data required in the template page using
<?php echo($rsTestRecord->getColumnVal(field_name")); ?>
My dynamic email content now works nicely, complete with images if required.
NB: I searched the forum high and low, but could not find a specific query that answered this.
Perhaps a short tutorial would help other WA users.