Images in Wordpress

You can insert images to your post or page from your computer, or reinsert from you wordpress gallery.

Figure 1

Figure 2

Figure 3

To add images from your computer, click on the small icon next to the upload/insert text (figure 1) and select an image from your computer (Select Files).
adding links

You can customize how the image looks once you upload it by clicking on the image once in your page or post and clicking on the edit image icon. This will bring up the dialog box you saw when you first uploaded the image (figure 3). From here you can realign, resize and add a caption.
When editing an image, clicking on Advanced Settings will provide more tools for customizing the image to fit you post or page.
For more on this, visit the tutorial on inserting/editing an image.

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