Hi Bill,
In the "Post a reply" box, look down to the 2 tabs and click "Upload attachment". Click "Browse". Choose the image you want from your computer's directory (if using a PC, by clicking on it and then clicking "Open" in your PC's "File upload" window - not sure how it works with Mac). Back in the "Post a reply" page's "Upload attachment" section click "Add the file". You can write a caption in the "File comment" box. You don't seem to have to click the "Place inline" button. You can see how it looks by clicking on the "Preview" button at the bottom of the page, but make sure you use your browser's back arrow if you want to go back to adjust something, otherwise you might loose what you just did, including text. If happy, click "Submit".
Regarding sizing of images, Circa 225kB at c. 1024 x 768 seems to work well for size when enlarged, so you would want to size the image before going through the above procedure. Images straight out of digi cameras are often over large when opened in the larger option in the posting. I find the simplest way of doing this on a PC with Microsoft Office is to first copy the image (important! - or you can chose "save as" at the end of the process - but I prefer to copy first), open the copy image with Microsoft Office Picture Manager, click "Edit Pictures", click "Compress Pictures", choose "documents", click OK, SAVE.
Iain