Ok, in layman's terms...
To copy a file from your computer onto this web site;
1. Click the INSERT MEDIA icon.
2. Select the BROWSE button. Another window will open up. This is a gallery to hold your pictures and select from.
3. Use the next BROWSE button to locate and select a picture file from your computer.
4. Click UPLOAD FILE. This will copy the picture from your computer to this web site. It is placed in your personal photo gallery.
5. Select one of the pictures in your gallery and click OK. It will be placed into your post.
It's a much longer process than needed, but the INSERT IMAGE button only seems to work for images that are on another web site. There is no button that allows you to copy from your own computer. If you desire to use that button you will have to copy your pictures to another web site first.