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Upload
your pic to a web hosting site..Photobucket, Flick etc
Paste the URL (address) in the box which says
'associated web images (optional)'
You can't post directly from your computer, like some other boards

Editing pictures
What the best software for making the pictures more compact before posting? I used Photoshop but I still couldn't get them tiny enough.

flickr
has been good to me. When you click on the image a size
icon is above the photo. Sm, Med, and Lg format. Med seems
to translate well.
Grabbing the url below the photo is an easy transfer.
The slideshow feature is nice and easy to navigate.
Photos can be private or public. It is free but they are
bugging me about a paid pro account. Still very reasonable.
I do find the time, though minimal, a small annoyance.
I often avoid the whole process even if i think an image would be
helpful.

Photoshop can make it any siz...
Photoshop can make it any size. Go to image size make it 72 DPI and about 7-8 inches at the largest dimension.