Let me see if I can tell you what someone told me.

Click the Home button on your dreamwidth account and go to the 'Create' menu.

Select Upload Images, then select a photo from your computer. Fill in title and description, then save.

Then if you click on View your Images at the top of the page you'll find each image is assigned two codes, Image Embed and Thumbnail Embed. The Thumbnail one is best in comments, the Image one is better for posts to journals. Just copy and past into your comment or post.

If you have any problems, just ask and I'll try to help. I'm a bit of a tech dunce but I try!