1. Find yourself an image hosting site (ie. imageshack, photobucket, imagemutt etc.)
2. Click 'Browse' and select the image you wish to host/post up
3. Click 'Host It'.
4. Wait.
5. When the image is uploaded, the host site will give you a few different codes to chose from, and might show you a thumbnail of the image.
6. Select the code 'Direct Link to Image'
7. Copy this code by holding down CTRL + C.
....back on the MM site
8. Press (alt + p) in you reply, then paste image link into the pop up box and all should be sweet
If you wish to take images from other sites, then use this guide: (taken from another forum im a mod of)
step 1:
right click on the image you want to transfer and select properties
step 2:
select the 'address' of the image
step 3:
hit (ctrl + p) and paste the link into the pop up
Your stolen pic will now be posted