First click on "switch to text editor" in the upper right corner of the post. If it says "switch to visual editor", then you're already in the right view and don't need to click anything. At this point, it should look like this:
Nect click on "Embed Pictures", which will also allow you to add an image by either entering the URL or by uploading the image from your computer. Multiple photos can be added in a single post using this method.
The option for adding pictures under the "text editor" view is the "Insert/edit image" button in the toolbar, which looks like this ->
. Unfortunately, this method seems to degrade the quality of the photo and is best avoided.