Use this BBCode:
[IMG=Url of Image..]
OR
Use the file attachment tool located on the 'Add Reply' page.
Click choose, find the image on your harddrive, click Add this Attachment. Once the file is attached to your post clicking the box 'Add into Post' adds the attachment id BBCode to the post itself, so you can choose where to display the attachment link. Otherwise I believe it is simply tacked to the end of your post.