1) If you're using IE9 you will not see ANY of the insert/format options that are available in the Reply section; it'll just be blank gray screen with headers, and nothing will upload (true for avatars, too), though you can insert basic text posts. IE9 will work better if you use "compatibility mode", you will see the icons then, but some features, like the spell check, still aren't functional with IE9. I strongly recommend using another browser such as Firefox around here.
2) It looks like the original directions in this post for loading a picture seems to require the use of Photobucket or another photo site. But I've always just uploaded images directly from my hard drive without problems; perhaps that's changed since this was first posted. To get a picture in the body of the post, hit "image link" in the Boardcode section, then hit "Add File" in the Attachment section below. You can then browse for your pic, hit "open" and then "insert file", and the correct coding will be there. You won't actually see if it posted correctly until after you hit "submit", however.
Hope this is helpful!