Okay, this is from the “View Source” on your blog page. It’s HTML. I have inserted line breaks between chunks to make it easier.
The first part, “a href=” makes the link. Then the part that starts “img” makes the picture. Right now it says the width of the picture will be 101 pixels, the alternate text will be “Knitting Bloggers.” But it doesn’t have a source (src) listed…it says “IMAGE URL HERE” instead. Where it says that, you need to put a link to the image, either hosted on your blog or on a photosharing site like Flickr or Photbucket.
Once you have that information, you can delete “IMAGE URL HERE” and put in the URL (which should end with .jpg, .gif, etc.)
Does that make sense?