Ok, so under the text area, click "Go Advanced"
Then go down to "Manage Attachments"
Select the files you want from your computer and then click upload
You will see them appear above the "Manage Attachments", now they are ready to go in your post, if you type our your regular message they will appear at the bottom as actual pictures (size of picture does matter, so if the original picture is tiny, its going to show up tiny in your post).
If you want to type text, then have a picture, then type more text you will have to click on the little paper clip next to the smiley face above the text area