Goto
http://www.imageshack.us/
Click Browse
Find/Select the picture to upload.
Click Open
Click Host it!
*Give it time to upload your image*
Then you'll be promted with a page full of links/codes, each on has a label after it 'Thumbnail for forums (1)' for example for what type of image/code.
Basically click in the text box containing the code for image type you want:
Thumbnails are smaller images that enlarge when clicked
Hotlinks are direct links to the images
Also choose it based on where you want to use the image, if it's to be posted on a vbulletin forum (like lomcn) use either 'Thumbnail for forums (1)' or 'Hotlink for forums (1)', and if it's for a website use 'Hotlink for Websites' or 'Thumbnail for Websites'
Now the correct text is highlighted for the link to your image, press ctrl+c to copy it, and ctrl+v to paste the code where you want the image to appear.
hopefully this should help