Adding images from your hard drive:
In the "Compose" mode of Blogger while creating or editing a post, simply click the "Add Image" button in the WYSIWYG bar.
Within the dialogue box that appears, use the "Choose File" button to select an image from your computer.
After selecting your desired image, you can adjust the size and placement of your image within the "Upload Image" dialogue box.
Once you click "Upload Image," you image will appear in your post.
Here is Blogger Help's tutorial.
