Blogger has now has an easy way to place pictures in your blog:
How do I post pictures?
When you click this icon, you'll get a window that allows to select an image or multiple images from your computer. Just click the "Browse" button to locate the ones you want. Alternatively, you can enter the URL of an image that is already online and have it inserted into your post.
I have already used it and it seems to work well. But time will tell.
Let me try it again with this picture of a naked blond pole dancer: