Click the "insert/edit image" button in the content editor to open the image toolbox.
If you know the URL of the image you can enter that in the "General > Source" field. Otherwise you can click the button at the right hand side of the source field to open the file browser and select the image from your uploaded files (if you haven't uploaded it yet you can do that in the file browser too).
You can specify the width and height (in pixels) if you'd like the image to appear at a specific size although this will be automatically calculated when you select the image. Or choose "Responsize" in the "Class" dropdown menu if you'd like the image to automatically scale up and down with it's content container.
When you're done just click "save" in the image toolbox and you'll see the image is inserted into the content editor.