You are using the "Upload an image" button down below the lower left corner of the reply box and receiving the error message? What does the error say?
Hmm, it worked ok for me... What type of error message are you getting? The process is pretty straight-forward. Click the "Upload an image" button and it should open up a window for you to search through folders for an image that you want to upload. Double-click on the image should start the upload or either you can highlight the image with a single-click and then press the "Open" button at the lower right side of that window. That should do it...from a Windows computer. I'm not sure what to say about a Mac or Linux computer but I would imagine it would work much similarly.
On my iPhone it basically has the same interface (Upload and image button), but then brings up choices for places to find the photo you want to upload...follow the prompts.
Hope some of this helps,
Best wishes!!!
Ed