When you use the IMG tags, it's basically a 'link' to a file normally from another site.. and is just shown in-line with the text. The size will be based on the photo you linked to.
Attached files are files that are normally copied locally to the site and act like an attachment to an email.. available if you want to open them. The site gives thumbnail previews of the the attached files. Like your post above.
If you want images to show up inline in your posts like you see doing in trip reports, etc, you need to use the IMG tags (use the advanced editor when posting for guidance) and include the URL to the photo. The photo has to be hosted hosted a image hosting site such as photobucket, picasa, smugmug, etc.