When using the manage attachment button all images will be displayed at the bottom of your post. Use the [IMG]...[/IMG] tags if your images are located elsewhere on the internet. You don't need to use both methods together. If you need to resize an image then you can use the JPEG optimization utility here - http://www.fragoutpost.com/jpeg-compression.php
A good size for posting photos in the forums is about 500-600 pixels.