In this how-to, I will explain, step by step, how to post and display images on the forums.

Step 1:
You must find a image hosting/sharing site to upload your pictures to. Here is a list of commonly used sites and whether or not registration is required to use them. Those that require registration will have a 'x' next to the name of the site.
Imageshack X
Photobucket X
Tinypic

For more sites, please refer to the source:
Wikipedia

Step 2:
If needed, register with, or login to, the image hosting site. Now make sure you have the picture somewhere you can find it, like the desktop. On the image hosting site, find the upload section and click, "browse". Find the picture and select it. Now click, "upload".

Step 3:
A few moments later, you will get a list of links that will link to your uploaded photo if used in the correct context. There are only one or two links you need to pay attention to. You can use either of these:
Forum link
Direct link
If there is a option for the forum link, just copy/paste that into your post and you are done! If you use the direct link, then move on to the next step.

Step 4:
Copy the direct link that's provided. Now, look up near the smiles section, above those are bb code buttons. Look for the "Img" button and click it once. Now paste your link, and click that "Img" button one more time. Now, you should be done, but lets check just in case. It should look something like this:

[img ]Insert direct link here[/img ]

Remove the space that I added to the bracketed parts. If it looks like the above (without the spaces), then you are good! Just click send and hope the picture shows up!

If you are still having trouble, or if I just suck at explaining things, here is a great website to show you how to post images using bb code.
BB Code Examples