Almost as simple as that.
They have to be resized generally,no bigger than 800by600 and no larger than 150KB I think.
I use photoshop to resize mine but there are alot of other ways.
Pretty sure JIM gave a free resizer download on the Waterhole section.
You can use an outside source such as photobucket or imageshack,etc.to resize and keep your pictures there as well.(like a external harddrive for pictures)
I find it just as easy to take them off my computer,do the text and place inline.