To post a picture you’ll need to upload the picture to a website such as photobucket.com or image shack.
Then you copy the exact URL for that picture, then you press the “Img” button along the top of the post a new message box, paste the URL for the image and then hit that button again.
To put a picture in as your avatar you find a pic you want, copy it to your photobucket.com or imageshack.com account then go into your profile and go all the way down to the bottom of the page, the last box should say “Link to off-site Avatar:”. Paste your pictures URL in there and hit submit. Make sure the picture is pretty small though.