first you have to host the pics. http://photobucket.com/ is where i host mine at. after that all you have to do is copy paste the image url in here without the quotes around the IMG tag at the beginning.
2. Upload your pictures. Once your photos are uploaded, just clik on the photo you want to link to your post or thread. Make sure to keep the thread open in a separate window so you will be able to "copy & paste" to your post reply.
3. Right clik on the photo after you have opened up your photo.