Hit the [Switch to Full Reply Screen] button and third from the left you'll see an icon that looks like a sheet of dog-eared paper with a circle, square, and triangle. Hover over it and the tooltip will say "Enter an image". Click this and you'll get a dialog box asking for a URL. Enter one and it'll paste something like this:

 Code:
   [img]http://www.axiomaudio.com/boards/gallery/15/thumbs/95.jpg[/img]



You can also just enter the BBCode tag like that directly.