You have two choices. You can attach pictures to your post as attachments by clicking the Manage attachment button in the additional options section under the place where you write your post.
To post a picture the usual way (by clicking the insert image button), you first have to upload your picture somewhere on internet. The most popular free websites for this are Photobucket.com and Imageshack.us
When you are done uploading your picture there, you will get a direct link which you must use in the pop-up that you get when you click the "Insert Image" button.