To insert an image into your entry, select Insert » Image…
from the Entry Editor's menu bar. The Image Dialog appears. If you
want to insert a local image, you’ll need to click the "
Browse" button [Image] to import an image into your blog. Previously published images
appear in the the "Images" combo box.
After selecting an image, its added to the entry and flagged to be published the next time you publish your weblog.