VSCode

• display a Markdown syntax preview pane? - ctrl+k v
  • Markdown All in One
  • Markdown Preview Enhanced

Images

• Adding images and links to files to Markdown in VS Code - press shift & drag from image file

Runner

• Markdown Command Runner - When clicked the associated snippet is run the current active terminal or a new one if it is busy.
• Run your README.md like a notebook in VS Code

Alternatives

• Typst

• reStructuredText (RST, ReST, or reST) - a file format for textual data used primarily in the Python programming language community for technical documentation.

see also

• The Ultimate Guide to Writing a Great README.md for Your Project
• Markdown is holding you back - args that markdown is missing semantic markup and advise to use some alternative for better support for LLM.
  • reStructuredText
  • AsciiDoc