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Firslty, have you set up categories etc in the Image Manager accessible from System Admin? If not, then you need to do that first. Add a few grpahics files using the 'Add Image' link at the top of the imagemanager. Then close it.
Then, for example, you are replying to a topic and you want to add a picture from the imagemanager, all you do is click the ImageManager button, and then left click either the left, central or right alignment graphic on the right hand side of the picture you want. An img tag will then be placed in your topic reply and then be shown when viewed.