Hi, if you go to
http://www.photobucket.com you can load pictures on there and then put them on here directly from that site.
Once you've loaded your pics onto the bucket you get 3 link under each picture. Choose the bottom link ( [img] ) and copy it to paste in here. As simple as that.
HTH
To deal with you quota limit then you can try this;
Click on the profile button underneath your post, and then click 'User attachment control panel' From there you can see all your added attachments and delete those you no longer want.