There is a new upload images button that appears at the top of the post editor. When you want to include a picture, just click the button and then drag and drop your picture into the popup box. It will automatically place a line of picture code into your post with your picture in it. This is something I have been wanting to get to work right for years... it makes it too easy not to add pictures to your posts.
Steve
Here is another sample pic. It is automatically resized and if you click on it, it will allow you see the image in it's original size and even download it.