1) At the top of the reply box, there is an insert image button:
2) Click this button, and you will see a new window pop up.
3) Click choose image to pick an image to upload:
4) Click upload file and then the green 'OK' button to upload
5) You should then be able to see a thumbnail preview of the image in your reply box:
6) When you press post this should then appear in your reply!