Once you upload the picture, you'll see it in the browse tab (click browse all for past uploaded photos). To add one of the pics to the post, click on the picture. A list of options should pop-up. Click "Using Thumbnail", it should switch to "Using Original", thne click "Send to Editor", this should auto insert the html to display the image into the post's text box.

That should do it. The upload tool is for the whole blog, so you need to also insert the photo into a individual post. It works a little different than the previous blog. Hope that helps. Let me know if you get it working.