Inserting an image using WordPress version 2.5 or later is slightly different than inserting an image using WordPress version 2.3 or earlier. Versions 2.5 and 2.6 are essentially the same. Version 2.6 is the latest version as of July 2008.
Inserting an image that you have already uploaded to WordPress but haven’t used in a particular post or page is actually a bit confusing in version 2.5 or later. You need to be able to find the elusive “Insert into Post” button. It’s not obvious.
There are many other settings and features in the “Add media” tools in the WordPress editing interface. This tutorial covers only the most basic aspects of uploading and inserting an image.
So check it out.
How to Upload and Insert an Image Using WordPress 2.5+