posted this on May 18, 2011 11:20 PM
In the tinymce there is an "Insert Image" option, but it there is no option for upload images. So how can you upload local images with your content?
The short answer is that image upload is not part of TinyMCE.
You could develop a plugin that does a FORM Submit and returns the URL to the uploaded images. Alternatively, there are a number of Open Source and Commercial plugins that may meet your requirements.