Put your cursor where you would like to insert the photo in your post.
Search Flickr for photos with a Creative Commons Attribution License: http://www.flickr.com/creativecommons
The photographer lets others copy, distribute, display, and perform their copyrighted work - and derivative works based upon it - but if you give them credit.
I searched for the words "woman" and "computer" and found this photo:
I clicked on the photo and selected,"Copy Image Location."
Then I clicked on the icon that looks like a photo in my Blogger post and pasted the URL of the photo in the pop up window. I chose left layout and small image size and hit Upload Image.
I can move the photo around in Compose mode to where I want it to be. Be sure to give the photographer credit. I like to put it on the bottom of my post with links to the photo and their profile on Flickr like this:
Photo credit: Portrait of the Artist at Work by Chris Kirkman.
Then I write the photographer a note using Flickr Mail and say that I have used their photo and send them a link to the post. You will need to open a Flickr account to send photographers email through Flickr.
You can also upload a photo straight from you computer. Just put your cursor where you want the photo to be, click on the icon that looks like a photo, find the image on your computer, select the layout and image size and hit Upload Image.