Pictures are inserted by clicking on the Source Box and inserting the HTML code and Address of the picture you want.
For example: enter something like this in Source:
<img src="http://img.photobucket.com/albums/v651/BerkaZerka/Other/Spaceballs.jpg" border="0" alt="Photobucket"></img>
To get This:
Videos are the same:
<iframe width="420" height="315" src="http://www.youtube.com/embed/izmrPpBHyvc" frameborder="0" allowfullscreen></iframe>