It needs to be online so that everyone who sees your post can see it. If you used a picture on your own PC, it'd only work for you.
Imageshack is the best. After it's done uploading just copy the "Direct Link To Image" thing and paste it in between [ img ] [ / img ] tags. There's a neat button to do it for you =)
Photobucket is gross, I don't get why people use it. It limits your space/bandwidth, you have to register, and any image over 800x600 is shrunk down. Pathetic :/