Your site is a content management system (CMS) and contains a file manager just like your PC. You can add images to any Text/HTML module.
Before uploading an image you will want to edit/crop it to first in a tool like Photoshop or Fireworks and then save the new image on your PC.
Edit the content of your module
Click on the arrow next to the "paperclip" icon and select image manager
Once there your document manager on your website will open
Create a new folder or select the folder on your site you want to upload your image to
Once you have selected a folder click the upload button in the header
Click select to open up your document manager on your PC
Select the image(s) you want to upload to the folder
Insert the image
Click "Save"