Click on reply and just above the text box, you'll see a little yellow box with a mountain in it. Click on that and copy and paste the URL to the image there. You'll need to host the pic somewhere on line first. Photobucket, Flickr, whatever.
I'm not sure how to post a pic directly from your computer. There may be a way, I just don't know it.
If you do the advanced reply, there is an option that icon is a paperclip, and you can add attachment files like images, pdf, etc.