Moderators may be able to attach pictures directly to posts as can "Thank You" members.
If not you need to upload them to a picture hosting site like Photobucket, Flickr, or Picassa. Or you can use Andrew's picture host. See this thread for details.
All these sites should have a tool or option to upload your photos. Once they are uploaded you just need to copy and paste the URL(s) to the photo(s) you want to include in your post. These URLs need to be embedded between the BBcodes for images. Photobucket and other hosts can generate the BBC embedded code for you and all you need to do is paste this into your messages. Otherwise while composing your post you can click on the Insert Image button on the message editor toolbar (yellow button with mountain and sun) and paste the URL in the dialog box. This will add the IMG tags and paste the results into your message text.
Most of the picture hosting sites have free accounts with limitations on image size, bandwidth and storage. Be sure to read the TOS/EULA carefully. Some like Photobucket say you essentially give up your rights to the images unless certain conditions are met such as using private folders.
Um... well I used to be a mod guess I need to talk with someone if I need to get them priveleges stripped since I havent been here for ages or not... its been about 3-4 years so be gentle I cant remember everything, after all I Am old...