Drupal 7.0 how to upload/insert images in content?

There are generally two approaches to add images to content in Drupal. One is via upload module (Drupal 6) / imagefield (Drupal 7) and another one (available through contrib modules like drupal.org/project/tinymce + drupal.org/project/imce). The first way is what you usually want if you have content like news or product pages where always an image is attached and placed at the same spot and in the same size. The second way is the right one if you want individually style the content of every page which brings more flexibility but should be avoided if possible since it takes much more time and can't be semi-automated.

I'll describe the first way in short:
* In the top menu klick "Stucture" and then choose "Content types" which brings you here: /admin/structure/types
* Choose the type of content you want to add images to and klick "manage fields"
* Add a new field of the type "Image"
* Configure the field type and save settings.
* Create new content of the type you edited via the top menu "Content" > "Add content" > "The Content Type you added the image field to"

You will then see that there is the possibility to upload an image wich will be displayed along with the text.
If you want to change the size of the image go via top menu to "Configuration" > "Image styles" and create an Image style. Then go to the content types page and instead of "manage fields" klick "manage display" and choose the image style as format for the image.