The same way as you do from your computer, except that when you select "Upload and insert an image", next to "Image file to upload", instead of a "Browse" button you will see a "Choose File" button. When you select that button you will be prompted to (a) Take Photo or Video or (b) Choose Existing. Choose Existing will take you to your iPad's Photo storage and you can access either photos you've synced or photos you've taken in the Camera Roll.
Perhaps the problem is you're too far zoomed in and can't see the dialog (or scroll to it) below the instructions?
Steve
