It's rather simple. All you need to do is click the "Insert Image" button (to the left of the HTML button), and paste the URL of the image  that you have uploaded from a photo hosting site (see list below) that you would like to post. 

DO NOT paste the URL's directly from other blogs or websites. 

- Use thumbnails (if not your post will be deleted).

- Use a free, non profitable image host. IMAGE CASH is not allowed here whatsoever.

Here is a list of image hosting sites: