If you don't want to use an Image Hosting site - you can use the Gallery Feature on here:-
1. Click into your Profile
2. Select my Gallery
3. Assuming you have an existing Album, click into it and click new image. If not, create a new Album (you only have to do this the first time)
4. Click the "choose File" button (near bottom of screen)
5. Click Upload Image (add a caption if you want)
6. The image will load and you will have a panel on the right saying "Share Image"
7. Copy and paste the test in the "Image Link" panel e.g.
http://www.cyclechat.net/uploads/1306777765/gallery_11031_137_385220.jpg
8. Use this text in the image upload box in the post you want to put a picture in.
Martin