Jaydon and I went camping this weekend. I've just spent an hour and half (maybe more) trying to do a post about the trip. I could not get my images to post on the page. They will upload but not show on the final post. I went through the help section and tried a few things. Finally I checked the "Known Issues" section and here is what the first item is:
Some users have reported that images are not displaying on their blog when uploading or editing from the new post editor in IE6 or IE7. We're investigating right now and will follow-up with more info as we have it.