I have been meaning to do a walkthrough of this but haven't made the time.
If I can pull this off and people find it useful (how could they not ) maybe the MODS could do a sticky.
Here goes:
Upload your photo through Picasa to your albums.
Click on the photo you want to use so it is on a page by itself.
Then click on the "Link to this photo" text on the right side of the screen.
Then click on "select size" for the photo such as 400, 800 or whatever from the drop down box.
Then highlight the entire line of text in the "embed photo" box and paste it into a blank word doc.
I have never been able to just highlight what i need so I do the whole thing and then cut it out. If you've got a workaround or you think my copy and paste skills blow goats then knock yourself out.
I'll be happy to eliminate the opening a word doc part.
it will look like this:
<table style="width:auto;"><tr><td><a href="http://picasaweb.google.com/lh/photo/hkBPc5KTCDwIwo6FcsvUnQ?authkey=Gv1sRgCKS6_J_Q4d6Rdg&feat=embedwebsite"><img src="http://lh3.ggpht.com/_JAPdm6GhhJM/SXkhRTqseAI/AAAAAAAAAVw/D7AWDoUjj80/s800/IMG_1086.jpg" /></a></td></tr><tr><td style="font-family:arial,sans-serif; font-size:11px; text-align:right">From <a href="http://picasaweb.google.com/geezerb/Proofs?authkey=Gv1sRgCKS6_J_Q4d6Rdg&feat=embedwebsite">proofs</a></td></tr></table>
now copy what I've highlighted in red and only what I've highlighted in red from your photo's information. Do not copy the "http://" part because it is already included in the M4C "add image" script.
Click the "insert Image" icon on the M4C menu and paste the red part into that and click ok.
Here is what I've just done in practice:
BTW if someone wants to take screen shots of this process and use what I've already typed to make a real good primer, feel free to combine the information.
http://lh3.ggpht.com/_JAPdm6GhhJM/SXkhRTqseAI/AAAAAAAAAVw/D7AWDoUjj80/s800/IMG_1086.jpg
I tried to add this vid, but the site may not support video embedding. I believe I have seen others embed with youtube on M4C, so that route may be easier.
All I got was the thum of the video to show up, which was me blasting a LCD monitor with the aforepictured Remmy 870 SBS.
http://lh4.ggpht.com/_JAPdm6GhhJM/SatMJfITnvI/AAAAAAAAAuQ/JJEmcA39oPs/s144/MVI_1139.jpg