Let's say that you have your photos saved in a folder on your desktop. You would click the Browse button, select Desktop and then click on the name of the folder, and then the name of the photo you want to appear in your post.
Select the type of file you want the picture to be. I usually select Picture (jpg) for photographs.
Choose the layout and size you want for the picture within the body of your post. And then click Upload. Your picture will appear in a new window and you click Done.
Voila! The picture appears in the message box. You can drag it up or down, but not left or right. If you have chosen, for instance, for the picture to appear in the center, you can't then drag it to the left or to the right.
If you change your mind, just click on the picture and hit the delete button on your keyboard.
After I include a picture, I always click Preview at the top right t0 make sure that I like the way it looks within the text. If I do, I then click Hide Preview and choose Publish Post.
I hope this helps. :)