I just fixed inline image posting. First, I set everybody's profiles to default to not show images inline then I lifted the global ban. So if you want to see images inline in the posts you'll have to opt in. Here's how you do that.
Go to your User Control Panel (the link is up near the top just under the forum name line in the header of the page). Once there, click Board preferences from the tabs near the top of that page then Edit display options. The first option there is Display images within posts: Change that to "Yes" if you want inline images to show.
User Control Panel -> Board preferences -> Edit display options.