You can't link pics off of your desktop. You have to upload them somewhere. As far as posting pics on the board you are right on the money.
Register at photobucket.com (it's free) and upload your pics to your album. Then right below the image there will be a box. Copy and paste the one that says direct link and then put the image tags around it.
Example:
[img] Your pic link [/img]
It has to be hosted first like this one.
http://i103.photobucket.com/albums/m137/bc2573/100_1522.jpg
