there are three ways to post a pic...
you can use bbc, which is brackets around img to open it, and a / img in brackets to close it- or use the img button in the tool list for the same thing.
you can use the 'load image' which allows an image to be pasted either from your computer or by url.. that easy... copy and paste.
you can use the attachment feature- which makes a thumbnail ot the bottom of your post that can be enlarged when a user clicks it.
for posts, the limit in size i think is 500x500, and due to bandwidth.. more on that in a second. when you click it, there is no limit... because of the 'light box' when you click, attachment is the preferred method.
i'm upgrading servers right now... to a straight up bad ass one... bandwidth and speed will drastically improve, and i can likely revisit the img size afterward.