as said, if the image is on your computer then include it in a post by adding it as an attachment.
If you want to include an image inline with your text then the image must bu hosted on the internet at another site. it's NOT a good idea to include large images in-line as it slows things down for dial-up users. The attachmetn option is better.
If you DO still want to inlude image in-line then you jsut press the picture icon and put the url of the image on the other site in to the pop-up window.
"A woman without curves is like a road without bends, you might get to your destination quicker but the ride is boring as hell'