Having had some time to rethink this, I recalled writing a short tutorial on another message board. Hopefully this will make my previous answer a little more clear.
As this is a more or less free forum board program, it doesn't have some of the fancier bells and whistles that $180 bulletin board programs have. Among those extras is ease of image upload and plenty of storage room for the images. As a result, the use of an image hosting web site, such as Photobucket or your own web site is required.
If you have a web site which you can use to host your images or decide to take advantage of web space provided by some ISPs(Internet Service Providers) as part of their Internet access package, you will need a working knowledge of URLs(Universal Resource Locators). The URL needed is the address to your web site plus the folder in which you have stored the images plus the image filename. Generally it will take the form: "
http://www.your_web_site.com/image_folder_name/image_filename". The image filename includes the extension. Commonly used extensions (image types.formats) are .jpg, .gif, .bmp or .png.
Photobucket is a fairly popular image hosting site that offers free hosting while charging for their premium service. There are other image hosting sites that may or may not offer free hosting. Having used Photobucket, I know that they provide you with the necessary URL to link to each picture you have stored. You need only register an account and upload your images and use the provided URL in the next step.
The image hosting part has been only briefly described in order to get to the use of UBB(Ultimate Bulletin Board) codes. These are similar to HTML tags, the major difference being the use of square brackets "[]" in place of the greater than/less than brackets"<>" used in HTML. When used, these tags/codes disappear (are not rendered as text) so I will have to replace the "[" and "]" with "{" and "}" to maintain code visibility.
Clicking the "insert image" button places the UBB image code, {img} {/img}, into the post thread box. The URL to the desired image is then placed between these two tags like this:
{img}http://i477.photobucket.com/albums/rr133/Spider_Curt/me_n_mic.jpg{/img}
When the proper brackets are used in this example an old avatar of mine should be seen:

note - if you know the tags you don't have to use the buttons
Hope this is helpful

Curt