Assuming you want to upload an image from your own computer, here's what I do -
1 - Make sure to select "Rich Text Editor" above and place the cursor in your post in the position you want the picture to appear
2 - Click on the "Image" icon. It's the one to the right of the Flag-looking icon on the top row
3 - Select the 3rd tab, labeled "Upload"
4 - Click "Choose file", select the file (picture) to upload, and click "Open"
5 - Click "Send it to server" and wait while the file is transferred to the iFly server
6 - Click OK
That's all! Now you can complete your post and the picture will be included
Advanced: Walter has graciously allowed us to upload larger pictures than in the past, but some of our pictures are of such grand quality that they are huge and require a scrollbar to see the whole thing. We can adjust the size of our pictures ourselves with a little effort. Once the picture is uploaded, it appears in a preview pane where you click OK (step 6 above). On the left side of this preview pane, you can adjust the size of the picture. The simple method the I use is to make sure the "lock" icon is closed, which locks the aspect ratio of the picture. Then I change the "Width" to something between 500 and 1,000 to adjust the picture size. Click OK, and then preview your post. If you don't like the size or placement of the picture, you can delete the picture from the post before uploading and try again.
Width = 250:
Width = 500:
Width = 1,000:
Normal size was a little larger.