I'll start with some basics and Swim and others who know the specifics will follow on.  

You do not post your picture, per se.  You post a LINK to your picture.  Your picture has to be on someone else's picture hosting site.  There is Imagecoast and there are others.  (I suppose you can even use your own server but if you're asking this Q then that's way too advanced.)  

Create an account on the picture hosting site.  Upload your pictures there.  Let's say the files are here:
www.host-site.com/tweetnell/picture101.jpg
www.host-site.com/tweetnell/picture102.jpg
www.host-site.com/tweetnell/picture103.jpg

When you prepare your ad, you put the LINK (www.host-site.com/tweetnell/picture102.jpg) into the "picture URL" box at the bottom.  Then you Submit Post.

When I click on your TER Ad, the TER computers send me your text and all the trimmings, but they send a call to the picture host-site.com to send your picture to me.  TER doesn't want to and doesn't have the storage space for millions of pictures; they're the middle man only.  

If you mistype the link or if your picture gets deleted, your text will still post, but there will be an error box about the link or pic ("File not found").  

It has come up recently: watermark your pictures, but make sure the watermark is TER-acceptable.

Good luck.

I am attaching a picture, not of Tweetnell, but of Tweety Bird.