You can upload images in most forums (vBulletin forums, that is) by using the attachment feature. When you're creating a new post, click on the paper clip icon above the text window. This will open a new window with this at the top:
Upload File from your Computer
Click on "Browse" and navigate to the picture you want to upload... then click "Upload".
Note that in that window there is a table below listing file types and sizes; This is the limit of the dimensions and/or file size allowed. If your image is larger in either way than any of these the upload will be rejected. So make sure your pic is the right size first.
Once you've uploaded the picture. Click in your post where you want it to show up. Then click on the arrow beside the paperclip and select the file you wish to place there...
Submit the post and you're done.
Do note that most forums have a limit as to how many attachments any given user may upload... reach that limit and you'll have to go in and delete some attachments. In this case they will disappear from the thread you had originally posted them in. There are ups and downs to posting with attachments and posting through another site such as photobucket. In either case the pictures may at some point be deleted rendering older threads incomplete.
EDIT: Here's a tutorial (not much more complete than my instructions but has pictures, if you register) on attachments:
http://forum.vbulletinsetup.com/f190...post-9770.html