What version of Android does the phone run?
If it's ICS (ver 4.0) go into contacts and select the contact you want to add photo to. Press the edit key (it's the wee pencil symbol at top of screen). Your contact will have a generic silhouette on the left side. Press this and you will be offered the option of taking a photo or selecting a picture from the gallery.
For the second bit go into contacts again. Press the menu key at the bottom left of the phone, select import/export from the menu and choose import from simcard