Do you mean when you post a reply you want the actual pic to show? If that's what you mean, the pic has to be hosted on a website somewhere...you copy the url of the pic (click on the pic and go to properties) into the 'IMG' button in the reply. But basically if the pic is on your computer you can only attach it. Just how Lit is set up.
I left off the opening an closing brackets in the example It needs '[]' surrounding it.
The URL you use has to be a direct URL to an IMAGE file -- ie ending in JPG, GIF or BMP.
The URL CANNOT be password protected, or hotlink protected -- ie the lit forums act like an unregistered user on the site hosting the picture and the site hosting picture has to allow other sites to use images stored there.