It's a bit like html, except instead of < and > you use [ and ], and instead of putting the URL into the src attribute, you just put it between the tags. So to display an image, you'll need to URL of it, for instance my avatar URL for this site is http://weeklybeats.com/forums/img/avatars/4481.png, if you were to put [img]before it and[/img] after it, it'd show as image.
If you still didn't get that, press the quote button on my post and you'll see what it looks like.