You can attach pictures to your post via the Manage Attachment section at the end of the post.
You can also "post" pictures that you find somewhere on the net, in your post and in your sig (IIRC). To do so, you need the address of the picture you want to post. To get the address (url) of the picture, you can usually right-click on the picture and select either "copy link" or "properties" (not sure exactly what is the option since my OS is in french).
Once you have the url, you put it between {img}{/img} tags (replace the "{}" by "[]"). For example, I can place in this post the ENWorld messageboard image:
Remember, if you need to use a picture more than once please use external web space. Don't attach a picture to a post and then link to that, either here on the boards or elsewhere. That hammers our database in a very bad way.
Edit- Hmm, now why did that show up as a picture when the same method (Manage Attachments) in the Cute Avatar Program thread just got me 3 "attachment" messages with links to my pics? Is it because this pic here is a gif and the others were jpgs? But jpgs are valid attachments. Just curious.
(Sorry, but this is the closest thing to a "testing" forum for trying out markup and such.)
Edit- Ok, I guess i was just having a Bad Karma day with that other post. Guess it's a good thing for the upgrade this weekend. Uh, thanks for the... err, help.