Images in post body

ok, let's say I want to make an image post. I click "image" and it lets me choose a file to upload, cool.

But what if I want to also have an image in the Body of the post. (i.e. where this text here is...) I see the lil' "image" icon there, but if I click it, it just adds a link to a URL for me to fill out. I cannot choose a file to upload. Is there some way to choose a file to upload so it'll go in the Body of the post?

thanks!?!