When you are in edit mode, drag an "image block" into the grid.


Now that you have your placeholder image, click on the placeholder to activate the toolbar. Then Click "Upload Image" icon to upload an image from your computer or if you have a URL click "Change image" icon to paste in an URL. If you have previously uploaded images, click the "Image Gallery" button to select those images.


Once your image is uploaded, if it appear's "stretched" click the "Reset Height" button to bring it into proportion.

See it in action: