All service levels are able to add images to forms by using the image's URL, and paid service levels are able to upload images to Formsite.
To insert a linked image, log in to your account, go to "Form Editor" and add an Image Item (found under Formatting Items). Add the image URL and click Save.
To upload and insert an image, log in and go to "User Menu->Files & Images", click the Upload button, and add your images to your account. Return to the form editor by clicking "Form Editor", add an Image item, and select the image from the Image Chooser.