You can upload images from your local file folder, or from the hosted files folder when The Raiser's Edge is hosted.

If The Raiser's Edge is hosted, please follow the steps in Knowledgebase solution #BB172995How to set up and access the Blackbaud Hosting Services Files folder (includes demo video).

If The Raiser's Edge is not hosted, select the local folder where your images are stored. (ex. c:\Libraries\Pictures)

For more information about designing your email, please see the tutorial Video Tutorial in the Create Email window in Online Express.  
NOTE: You must view the Video Tutorial from within Online Express.  Clicking the link above will take you to You Tube, but the video will be Private.