Click the button that is circled in red on my pic and put in the image url

Like this... um when I do that the preview window has this text in before changing anything.

Lorem ipsum dolor sit amet, consectetuer adipiscing elit. Maecenas feugiat consequat diam. Maecenas metus. Vivamus diam purus, cursus a, commodo non, facilisis vitae, nulla. Aenean dictum lacinia tortor. Nunc iaculis, nibh non iaculis aliquam, orci felis euismod neque, sed ornare massa mauris sed velit. Nulla pretium mi et risus. Fusce mi pede, tempor id, cursus ac, ullamcorper nec, enim. Sed tortor. Curabitur molestie. Duis velit augue, condimentum at, ultrices a, luctus ut, orci. Donec pellentesque egestas eros. Integer cursus, augue in cursus faucibus, eros pede bibendum sem, in tempus tellus justo quis ligula. Etiam eget tortor. Vestibulum rutrum, est ut placerat elementum, lectus nisl aliquam velit, tempor aliquam eros nunc nonummy metus. In eros metus, gravida a, gravida sed, lobortis id, turpis. Ut ultrices, ipsum at venenatis fringilla, sem nulla lacinia tellus, eget aliquet turpis mauris non enim. Nam turpis. Suspendisse lacinia. Curabitur ac tortor ut ipsum egestas elementum. Nunc imperdiet gravida mauris.

Edit: Let's try again, and if no picture is added I am going to say it might be my computer since this is the only website that won't let me copy or paste in this box that I am typing in right now due to security setting.

YES!!

How do you post a picture that is saved on your computer, not a URL

Upload the photo to a hosting service such as Photobucket. 

Not sure if you can host from facebook or not.  I have never tried it fom there.

Yep. The image has to be hosted.