Hi DDL, not sure if it's the same for everyone's system but if you've re-sized your pics. to 500 pixels they should be in a file called 'Picasa Exports' in 'My Pictures' (if you're using Windows XP).When you want to add one to your post you click on the little paperclip shape next to the smiley on the screen where it says 'Fonts', Sizes' etc. & a box will appear on your screen. Click on 'Browse' & go into 'My Pictures' then select 'Picasa Exports' then select the photo you want. Click on 'Upload' on the box which is on your screen & when this has uploaded click'Close this Window'. When you post your message your photo will then appear as a thumbnail at the bottom which you can click on to see a larger view.
This is probably not the same for everyone as some people seem to be able to get full size photos to come up in their message - no idea how that works! I'm a bit 'dim' myself when it comes to computers DDL, so if I can manage it I'm sure you will!
