<--- This isn't going to work. For a start, that's on your PC rather than the internet.
You need to first upload it to a hosting site; I use Picasa, but lots of people use photobucket. Any of them will do.
Copy the URL for your photo.
Click on the little icon of a picture (it looks like a painting of a tree).
Click on the <From URL> tab.
Uncheck the <Retrieve remote file and reference locally> box (because we don't have that facility).
Paste your URL into the box and click <Ok>
Voila!