First of all, you have to have that file hosted somewhere, you can use services like photobucket or ImageShack.
Once that file has been hosted (saved onto a web server) you can proceed to load it onto the post. If you hit the IMG button, a box will open and all you have to do is paste the URL (web address) of the photo you have just uploaded to the server. Once that is done, you hit OK and your photo will be shown in the post.