you need to upload some first onto the internet to a site like photobucket click here
which is free to use.
when you want to insert a picture into your post you find the pic' your looking for in your album, click on the box that says IMG Code below the picture, a little yellow box then briefly appears and says ' copied '
go back to the post you are putting up, type what you want type and when you want the picture to go in simply right click your mouse and select ' paste' and the image code will appear as a series of text and numbers below your writing.
click on the button that says preview (you should see it when you're replying to a post or creating a post) and you'll see the picture there, you can then carry on writing if you wish and insert more pics before you submit it as a completed post.
your picture will appear like this then . . . . .
you can use the IMG button you've been looking at and trying by just clicking the button then right clicking and choosing paste again, but it will insert these symbols before and after your picture [img] . . . . . [img]
thats why i dont bother using the button itself and just paste the copied text, you can modify it, or one of the mods will do it for you, but its just easier to paste the text straight into your post.
hope i haven't confused you too much lol