You have to upload the picture to a picture-hosting website (Photobucket, Imageshack, etc.) and then grab the direct link that they provide (typically, it will end with whatever format your picture is in, so say its a jpeg, then it'll be .jpeg)
You can use dropbox to host images.. See my signature.. No need to sign up for photobucket or cruddy sites like that.. To use dropbox, just place the item to share in the public folder and right-click on it and choose "Copy Public Link" from the dropbox context menu. Then put that in the URL box on here. Not complicated at all..