To insert a picture in a post, click the 'Insert Image' button that appears in the toolbar over the box that you enter the text in. Click 'choose file' to navigate to the picture you want and click 'open' - the file name will appear in the dialogue box. Choose a size (preferably medium) and click 'upload'. A bunch of incomprehensible stuff will appear on your post - ignore it. The pic will appear when you press 'Post Message'.
Sadly, this does not seem to work with the iPad.
If the picture does not show as you want it to, click 'more' on the right of the screen and choose 'edit post' to upload the picture again with a different size or location.