go to edit your site in your site manager and it will give you a button called something like image or file manager you'll then get the chance to browse your hard drive and select your image to upload. You'll then store it on the freewebs system until you need to use it in a page where you'll see a button which says insert picture or photo or something similar. It then gives you the choice of any of the images you've uploaded. Hope this helps, it really is dead easy.
you could also go to www.photobucket.com and sign up (its free) then basically upload your pics onto there (its like a huge online album for pics) and theres a choice of sizes or clickable thumbnails and it will generate the html codes for you just to copy and paste onto your website! Good luck :)