You need to go to a web based photo sharing site such as Imagecoast, and upload your photo there.  They'll have detailed instructions on how to do that.   Once you have your photo up there, it will have a URL which you then copy and paste into the window that comes up each time you start a post on here.

That's all there is to it.

imageshack,is like 30$ a year

I use blog spot/blogger

It is free. Just make it private (only you can see your posts) and post a photo there. Then go to edit and get the code.  
If interested, just email me and I will show you how as you need to get a portion of the code. It is very easy and as I said it is free.