OK, clicking on "Attachments and other options" and dragging images onto the box works, but it produces small thumbnails (which can in turn be clicked on to expand). However, nothing I've been able to discover will embed the entire full-size image into the body of the post, rather as Canis' latest posts do.
What's the secret? Because I'd be happy to go back to my earlier posts and replace the thumbnails with full-size images.
(Also, is there or can there be any way of deleting a post entirely? My "Image test" post was a failed experiment in placing large images, and could certainly be axed...)