The Inset command of Mathematica contains a variety of arguments and options relating to the position and properties of the inset materials within the surrounding graphic. This Demonstration shows how these settings interact. The little red rectangle shows the alignment point of the Inset as determined by the interaction of the placement and alignment coordinates.
Using a raw coordinate (rather than one prefaced by ImageScaled or Scaled) within Inset is most easily used when the user knows the plot range of the enclosing graphic.
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Embed Interactive Demonstration 
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