For your avatar...
select "User CP" from the menu bar (upper left) then choose "Edit Avatar". In the Custom Avatar panel, choose Option 1 (upload from a website) or Option 2 (upload an image from your computer).
For pictures, either upload your pics to a hosting site, such as Photobucket or Picasa, etc. and copy the image link from it to your post
-or-
use the attachment function in the composition window (it looks like a paper clip) and upload images directly from your computer.
I've tried both. Hopefully someone who knows more about it than I do will also reply.
Good luck!