The primary, suggested method for adding an image to a post here on Cyrodiil Forums is to upload it to the internet, usually using a free image sharing site, and post the link or image address using the code buttons provided. I would suggest
Photobucket. It's free, has decent file size limits and options, and has some easy links to post links and images once they're uploaded. You can use any service you'd like, as long as it allows direct image viewing of this sort. You can even use your own website, if the functionality is there.
For the instructions below, we will be using Photobucket as an example. It should be relatively simple to adapt the technique to any other service you might find.
So, sign up for an account, then click on "Upload". First, change to the file download settings you want. I would suggest using 640X480 or smaller. This forum squishes them to fit 640 wide if it exceeds that width anyways. [Personally, I use the "1 megabyte file size" option only because I'm very careful about cropping and hitting target file sizes before trying to upload. (Photoshop and other graphic programs have plenty of options for such things.)]
Next, click on "Choose Files", browse to the location of the files you want to post, select the files you want, and click 'open'. Hold down 'ctrl' to select more than one file.
The page will refresh, then simply click into the code box under your new photo called "IMG Code". This will automatically highlight the entire code and copy it to your computer's clipboard. you can then paste the code into your message by either right-clicking and selecting "Paste", or by using 'ctrl+v'. The image code you just pasted [ IMG ] ~~address~~ [ /IMG ] will become the picture when you preview or post your message.

You won't need to use the forum code buttons if you use this method because the code is automatically inserted by Photobucket.
If you'd like to do more advanced code combinations for links and images, this is a breakdown of the syntax for the four main combinations.
[ url ] ~~address~~ [ /url ] makes a link
Example: Http://www.google.com[url]Http://www.google.com[/url]
[ url = ~~address~~ ] Title [ /url ] makes a link with words instead of just the address showing
Example: Google[url=Http://www.google.com]Google[/url]
[ img ] ~~address~~ [ /img ] displays an image right in the browserExample: 
[img]http://www.google.com/intl/en_ALL/images/logo.gif[/img]
[ url = ~~address~~ ][ img ] ~~address~~ [ /img ][ /url ] makes an image that is also a link
Example: 
[url=Http://www.google.com][img]http://www.google.com/intl/en_ALL/images/logo.gif[/img][/url]
In order to insert this code into a post without needing to type it all out, simply highlight the text you want between the beginning and end statements and click the appropriate button. For example, to make a word bold, highlight that word and then click the

button above. If you click a code button without highlighting any text it will place the code around your cursor. Anything you type will be inside the code and affected by it, until you move your cursor outside that area.