First, photos should be resized. Some hosting sites will do this, but I've heard people not having luck sometimes with the hosting site resizing so I prefer to do mine before.
Generally, posted photos should be around 400-600 pixels by the same ratio. This size is easy to see on most monitors, but doesn't eat up a ton of bandwidth when trying to load pages. Most people now days have at least DSL connections, but believe it or not a few still have dial up connections.
Once the pictures have been resized, they need to be uploaded to a site that hosts pictures and allows them to be linked to other sites. There are many free sites, these include Photobucket, Imageshack, flickr, and I think smugmug will allow linking, but smugmug is not a free site. You can also pay to have images hosted. I have photobucket, but I also have a paid site (and smugmug) I use for backup in case photobucket is being weird.
Once the pictures are uploaded, you have to use the vbulletin image code. You cannot use HTML. You copy the IMG code, paste it into the quick reply box, hit post quick reply and... there you go.
Image below shows where the code is to post on MiceChat.
These are a few I found doing a quick google search. I have a Mac, and have my own program (Graphic Converter) I use, so I can't attest to how or if these work but it will give you some place to start.
The following links have several programs that you can download a demo first. If you think you are going to continue working with images, it would be a good idea to try out a few, find one that is easy to use and that you are comfortable with, and go ahead and buy it. Most are not that expensive.
I just upload mine to Photobucket and then resize them there...they've made it pretty easy to do now.
If you can get this to work its great! It would save you tons of time and be easier. I've had some people say they have problems with the photobucket auto resize, but if if works, great! If you want more control over the image size, then you can use a resizing program.
Try both!! Get a photobucket acct, upload some pictures, and experiment! Get a resizing program and play with it! Experimenting and playing around with images is the best way to learn!