You can easily Insert an Image by clicking on the "picture" icon in your tool set. 

You will get a Pop-up browser that looks like this.

Click the tab "Upload">>>Browse to the location of the image on your computer>>>Open the file>>>Click "Send it to the Server" button

Your image will be previewed and you can now set alignment...(left, right) and alternative text  (a little roll-over title)

Then click "OK"