Hi dawgs,
You have a couple options for pictures.
1. You can attach them to you posts. Scroll down when you are in the advanced editor and you'll see a Manage Attachments button. Click on that and you should get a popup window. Click on one of the Browse... buttons and locate your picture. Then, click the upload button.
2. Use the Insert Image button - you'll need a valid URL. I got this one by right-clicking on your picture and choosing 'Copy Image Location' from the popup menu. Then I pasted it into the Inset Image popup window.
I hope that makes sense.
