When you start a new post, click the picture icon on the toolbar to upload a photo from your computer. You can drag the photo to the upload box or click inside the box and to upload the photo from your computer.
You also have the option to add a photo that's hosted on a photo hosting site like Flickr or Photobucket or your personal website. Click the links icon circled in red and paste in the link to your photo. Keep in mind that this may or may not work depending on your photo hosting site and your membership level.
