There are at least 3 ways to add an image:
1) Double click anywhere on your page, the circular option menu will appear (see image right)
Select the image icon (RED)
Add an image from Google Drive, by URL, by searching Google, or from your Photos folder
-or-
Select the upload file icon (GREEN)
Select an image from your computer
2) Use the Insert menu on the right-hand side, select "Images"
Choose select or upload
3) Copy (Control + "C") and Paste (Control + "V") a picture from elsewhere
IMPORTANT: You can only add images that you own the copyright to (that means you took, drew, painted etc it yourself) OR pictures that are in the public domain OR the author has posted under a Creative Commons or similar license and allows anyone to use his/her work. This means images you just find on Google are not suitable to use UNLESS you are transforming them in a substantial way.
How to Use Google to search for images you can use without fear of copyright infringement:
Other search engines for images you can use without fear of copyright infringement:
https://sites.google.com/site/mrpbps01/image-search-engines
http://www.only2clicks.com/pages/joycevalenza/343504
http://compfight.com/ - and select the creative Commons license filter
Looking for copyright friendly Music & Sound?
http://www.only2clicks.com/pages/joycevalenza/424061
Want to understand why this stuff is important?
The short story of an 11-year old boy who put a copyrighted picture of Salami he found on Google into his Blog:
http://edublogs.org/2012/09/18/salami-and-google-images/
Great resources to help you understand copyright and how to use copyrighted works:
The EduBlogger: The Educator’s Guide to Copyright, Fair Use, and Creative Commons
http://theedublogger.com/2012/02/09/the-educators-guide-to-copyright-fair-use-and-creative-commons/
Edublogs teacher Challenges -- Activity 7: Fair use, copyright, and introduction to using images http://teacherchallenge.edublogs.org/2012/08/20/activity-7-fair-use-copyright-and-introduction-to-using-images/#searching