There are two ways to load an image -
1. Linking an image from another website (for those that use the online photo album sites etc.) :-
Click the "Insert Image" icon
Paste the image URL between the "img - /img" tags so it ends up looking like
[img]http://www.awgb.co.uk/images/mainlogo.jpg[/img]
Here I have linked an image from the AWGB website using this method.
2. Uploading an image to the forum :-
Click the "+ Additional options" below the text box.
Click the "Browse" button
Select your image (which must be less than 200 kb in size)
The badge image was uploaded using this method.