You will notice that when you click the Insert/Edit Image icon on the text editor, it will ask for the image url, which you may or may not have. Now, to get an image url, go to File attachments and attach a new file from your computer. When done, uncheck List. You will find the image url just below the attached file, which you can use to insert an image to your post.

Where's the File attachments link? From the text editor as you create your post, scroll down and you will find it among the other options.