Embedding the image with HTML code:
And using the internal Blogger "Insert Image" button from the top toolbar:
The Insert Image option is definitely a simpler way to add an image, which is a benefit. Both embed and Insert Image allow you to click on the image to scale it to the size you want, and even work with the image properties. When you select a file to Insert from the Insert Image button, though, it is limiting as to where you can insert from. For example, you can't insert from Flickr, which I get, because its owned by Yahoo. :)
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