correct way to setup ckeditor + media

Hi,

I would like to use this module with media module and ckeditor. Normally I use media ckeditor module to insert images inline. When looking at the source - it inserts token, that is replaced by markup when rendering content.

I managed to use same setup with picture module - what I do is to change the file display admin/structure/file-types/manage/image/file-display by removing image and selecting picture.

However, now the plugin inserts complete html markup inside ckeditor.

I do not use following picture module settings:

1) text-formats:Make images responsive with the picture module (token inserted by media module has no img tags)

2) admin/config/media/picture/settings: here I do not check include picture mapping in the CKEditor image dialog (this is for ckeditor image insert widget, not for media insert widgrt)

Question: Is this the correct setup? Thank you for any help.