I spent some time today hunting down a few bugs in the system and now image/file uploads is now available.
The process is a little different than previously; there is now an Upload Attachments button below the post text entry box. This will open a window where you can add one or multiple images before uploading (drag and drop is supported). The forum is set to automatically insert the upload into your post once it/they upload.
Image types allowed : jpg, gif, png
Note: there’s still a bug where .jpeg files are rejected with error 109 even though jpeg is on the allowed file type list. Workaround: Simply change the file extension to .jpg and re-upload.
Once images are inserted into your post, you can select it and then edit display options by clicking the Edit/Insert Image button in the toolbar.