On the Objects palette simply click on the tree.

You can also use the Insert menu and select Image.

You will be prompted for a filename and can navigate your local directories in order to find it. Once you have found the image you would like on your page, either double click on it or click on the Select button. Now the image is on your page.

As you were navigating for the file, did you notice the fields near the bottom of the box? These are very important so we'll pay special attention to them. You will see a URL field, which will have either dots and slashes or a full directory path.

This is how the page will find the graphic. This can be controlled with the 'Relative to' checklist. If you select Relative to Site Root, it will start looking from the root of the site '/' and will continue down the directory structure until the graphic is found. If you select relative to document, it will look for it in directories relevant to the document. This may seem irrelevant now, but it can save some hassles in the future. If you have your graphics and links relative to the document, and you choose to move the document later, all the graphics will break.

So now that you have an image on the page, what can you do with it?