aadding an image within a node

Can you not add an image inside a node easily? I tried using the attach function when creatign a new node, but it just puts it as an attachment. It seems like such a simple task, say to add a picture to view within a blog posting...but I can't seem to do it.

What I do now is copy the image to my files/ directory over FTP and HTML code it into the node....but my other users that blog on the site (and of course don't have the access or knwoledge of FTP) can't do it. It makes for boring blog postings with no pics!

There has to be a simple way.