To create an Image click on 'Create content > Image'.
Give it a title (this will become the image caption), then browse for the image on your computer.
Select an appropriate gallery from the drop down list.
You can add tags, a teaser and body if you'd like to.
Select audience (generally, you will make a picture available to every website user, you you need to choose 'public' as well) then click 'Submit' to save.
An alternative way of uploading an image to the website is to use the camera icon on the editor. The the 'add image' facility is open, click the 'upload' button. From then on, it works the same as described above.