This has changed. Please refer to this video tutorial:
www.byhand.me/component/option,com_seyre...ask,videodirectlink/
Number 2 ---> Use this key to upload an image to ByHand's server for use in your blog.
It may take a while to load as it loads all images in the directory. Once it loads click insert on the LEFT.
Beside where it says FILE, there is a button that looks like a page with a green arrow. Click that to choose your image from your computer.
Click browse to choose your image. Choose your size. You can only choose one size. If your image is larger it will be scaled. Then click the green arrow button beside the browse button to upload your image.
Once your image is uploaded it will show in the Preview Box. To insert your image into your blog post, simply hit insert at the BOTTOM of the box.