If you want to display the images directly on your current post, you have to use the [img]...[/img] format.
You can also attach the image file but the attached image will appear at the bottom of your post, which won't be very neat to look at. You can also attach the image and use the [img]...[/img] code of the attached image again to show up the image directly on your post again.
For tidiness sake, you can upload to any of the free image hosting sites and link the picture directly from there on your post. It will appear tidy and you can recall the same image in other posts. The process is longer than directly attaching the image from your hard drive but it's your call.
I'm using flickr account. Previously I was using the free account, then I registered for the pro version.