Yep - in Rich Formatting, click the Insert Image button (just to the right of the indent buttons). Select source - upload (there's a limit of 4 MB per image, 20 MB for your account, which Bryan recently raised to that level from 5 MB per account), From Site (images you've already uploaded), or From URL, where you paste in a link (I link from my Flickr account, for example). In the entry tab, there's a field for Max Width, and it's pre-filled with 550 pixels. If you delete that, your image will be displayed in the thread at the max width, which is slightly more than 800 pixels wide (if it's natively larger, it will be resized, whereas it used to be cropped). Best to use a source that's not much larger than 800 pixels, though, to save bandwidth and reduce image loading time.