Underneath the Save Draft / Preview / Submit buttons, you'll see a small "Attachment" link. Click that. Then you'll see an Add Files button.
Once you upload the images, you can publish As-Is and they'll become attachments below your post. Or, you can click somewhere in your post you want to embed them and then click "Place Inline" and they'll pop the necessary phpbb code to put it inside your post.
- This is an example of an image where we used "Place Inline" a post, which also can take captions. :)