roebuck, if you look at the top of the Quick Reply window, or the bottom of the Full Reply window, you'll see a little drop down window. The default is for it to say "using UBBCode", but if you push the button to see alternatives, one of them is "using HTML". For some unknown reason, your reply window had the HTML option selected, which makes it impossible to post pictures. If you want to use HTML in your posts, just select the "using HTML and UBBCode" option.
(I didn't work that one out for myself, I got some help from Bruce.)
