Look for the "Upload image" tab in the edit window near the bottom. Click the Browse... button, select the image from your computer, and then the Upload button to copy it to HB's server. Once the image is uploaded, click where you want to insert it in your post and select the Place inline button.

You can find all the images you've uploaded in Manage images tab of your User Control Panel.

Note: Remember to resize your image before uploading. Most digital camera come with image editors, or you can choose from one of many free image editors such as Google Picasa, IrfranView, or free online resize tools like shrink pictures and pic resize.

_____________

UPDATED: Prior to the native image upload capability on this site, members used off-site image repositories. Scans for "not found" links revealed that over time, many members moved/deleted/renamed/abandoned their images, leaving HB pointing to invalid link. For this reason, members are strongly encouraged to upload to this site so the context of the thread's images will be available to future visitors. This is especially important given the increasing number of websites adopting expiration policies like Photobucket's:

Photobucket wrote:We noticed that you haven't logged into your Photobucket account xxxxx for about 80 days. You still have images in this account, and some of those images are actively being viewed on other sites.

If you want to keep these linked images active, you must log into your account xxxxx by MM-DD-YYY at http://photobucket.com.

You must log into your account at least once every 90 days to keep your linked images active. You can also upgrade to Pro to keep your linked images active permanently.

Thank you for taking the extra steps to upload images to HB so they will assuredly be available to future visitors.