First you need to host the pictures online somewhere, there are various sites that allow this, Photobucket seems popular.
Once your picture is online you need to find its url which you can do in Firefox by right clicking it and choosing 'copy image location' or in IE by right clicking, choosing properties and finding it there (I don't have IE on my machine so can't be more precise, sorry).
Finally you make your post, above the smilies are some buttons, the third one in is a picture, click this and a pair of img tags appear in your text with the cursor position between them, paste your picture url there and it will show up in your post.
for example:
[img]http://leadadventureforum.com/index.php?action=dlattach;attach=14;type=avatar[/img]
produces this:
edit edited twice for appalling spelling, sorry