Yeah Reyn, but he's right, it needs to be online already first. You cant link in a file thats on your own HD (Hard Disk). Chumly, you'll have to upload your pic somewhere first before you can link it in.
Luckily, that can be really simple. Go to
http://www.pictiger.com, for example. You dont even need to register. Just click "browse", look up the picture file on your HD and double click it, select a category and click the "Upload button". It'll then give you the URL for the file in different shapes - and thats it!