If the picture is on your computer, you can click on Additional Options... below the box that you type into. This will reveal the Attach option. Click on the Browse... button and you can find the picture in your computer's file structure. Select the picture and click on the Open button - or just double-click on the picture. The picture will be added to the end of your post when you submit it, like the chihuahua picture at the end of this message. You won't be able to see the picture until you have posted your message - the Preview button doesn't show it.
If the picture is somewhere online (being mindful of copyright laws of course!) you can put its address within "img" tags, like this:
[img]http://chi.lexigame.com/images/chilogo3.png[/img]
The picture will be included in your post, thus -