Lethe used an imagehost, you can click on his pictures to where they're hosted. You can link directly to an image by copying its url and wrapping it with [img][/img] tags.
That's not exactly what Lethe did, he posted thumbnails, and used [url] tags so you can click on them to see the fullsize images.
If you want you can simply attach images to your post, and they'll be hosted by the forum. Simply go to the Advanced postbit and scroll down, you'll see a Manage Attachments option. Give it a click, and you can upload a couple pics. They'll simply appear at the bottom of your post.