Probably the best way to embed images into your posts is to use a service such as
ImageShack. You can simply upload any image to them, and they give you several ways to link to that image.
For forum use, generally there are only two of the linking options that are useful.
For larger images (in pixel size), the best way to link to it is the "Thumbnail for forums (1)" link, which puts a small thumbnail image in the post that users can click on to see the whole image.
Code: {URL=http://img74.imageshack.us/my.php?image=foresttc4.jpg}{IMG}http://img74.imageshack.us/img74/9610/foresttc4.th.jpg{/IMG}{/URL}
(Replace "{" and "}" with "[" and "]", respectively.)
For smaller images (in pixel size), you can enclose the "Direct link to image" in
IMG tags, which simply puts the image itself (not a thumbnail) into your post. You may also use the thumbnail option described above if you wish and if available.
Code: {IMG}http://img119.imageshack.us/img119/4305/rookdz5.jpg{/IMG}
(Replace "{" and "}" with "[" and "]", respectively.)
I believe these are the best ways to include images into forum posts. If any of the admins have any other input, please feel free to include it.