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I upload by attachment which is next to the smiley icon on your message window.
There you browse over your pc and upload, when it is done close the dialog box.
Usually from the web I copy to desktop and use the above method.
It's better to use the "Insert Image" option and use the image's URL from another hosting website where you have unlimited space or say use Amazon, etc.
Anant, create an account on either Imageshack or Photobucket. Upload your pics there and post the "IMG" link here. Ensure you create your account so your pics are organised under your account and available anytime you want to access it.can't see the option of upload the images to imageshack. This is my first time