To add an image to an email...

Find the email (or email template) and open the content editor (by selecting Edit next to the email or template under the Follow-Up tab)
Select the "Insert/Edit Image" icon (the mountains with a sun)
This will open up an Image Properties box. Select Browse Server
This will bring up all your stored images on your InTouch site. To add a new image, select Choose File.
Find and select (Open) the image on your computer
Select Upload
Your image file should now seen in your list. Find the file name on your list and select it
You should now see your image in the editor and it will have properties on the left side. You can re-size your image here if needed, but it is best practice to upload the size as desired. Large images, even if re-sized to be quite small in this screen, take longer to load in the recipient's email. Select OK.
Your image should now be visible in your email or template

Tips:

Keep your image file names simple, like HappyBirthday.jpg or Lead_BDay.png. It's best not to include special characters or spaces as these may effect the deliverability of your image
Upload the size as desired. Large images, even if re-sized to be quite small in this screen, take longer to load in the recipient's email.