Here's a step by step. I hope it helps.
From the editor screen, you know... where you edit your text? Make sure you put the cursor where you want the pic to appear. I usually select "center align" for mine to keep the pic centered.
1. Click on the mountain pic icon from your tool menu. It's called the "Image" button. This will open a new pop-up window titled "Image Properties."
2. There will be several tabs in the "Image Properties" window. Click the "Upload" tab.
3. Then Click on the "Browse" button and find your pic file and double click it. JPEG pics usually works best from what I've tried. I've had trouble with other pic formats.
4. Once you selected your file from your PC to upload... click the "Send it to Server" button. You will see it upload and then it will show a preview of your pic.
5. From here you can change the dimensions of your pics: width, height... just change the pixel size number. Once satisfied, click the "Ok" button. and your pic should show up in your large text window.
PS: This works great on the first try, no problems. BUT if you ever go back in and try to edit your story/chapter with the image, it might be removed. It usually happens when you post "multiple" pics simultaneously. So you should do your pics one at a time... submit... then go back in for the next pic.
UPDATE: Booksie has recently added a new function called "Browse Server" which shows in the pop-up box after you click the "Image" button. Now you can select any pics you ALREADY uploaded to the server. Thank you Booksie for adding this feature.
Do your pics last when you don't have anymore text editing to do.