I'm using ASP.NET Web Forms for blog style comments.
Edit 1: This looks way more complicated then I first thought. How do you filter the src?
I would prefer to still use real html tags but if things get too complicated that way, I might go a custom route. I haven't done any XML yet, so do I need to learn more about that?
Use an XML parser to validate your input, and drop or encode all elements, and attributes, that you do not want to allow. In this case, delete or encode all tags except the <img> tag, and all attributes from that except src, alt and title.
If IMG is the only thing you'd allow, I'd suggest you use a simple square-bracket syntax to allow it. This would eliminate the need for a parser and reduce a load of other dangerous edge cases with the parser as well. Say, something like:
Look at this! [http://a.b.c/m.jpg]
Which would get converted to
Look at this! <img src="http://a.b.c/m.jpg" />
You should filter the SRC address so that no malicious things get passed in the SRC part too. Like maybe
Look at this! [javascript:alert('pwned!')]
If you end up going with a non-HTML format (which makes things easier b/c you can literally escape all HTML), use a standard syntax like markdown. The markdown image syntax is 
There are others also, like Textile. Its syntax for images is !imageurl!
@chakrit suggested using a custom syntax, e.g. bracketed URLs - This might very well be the best solution. You DEFINITELY dont want to start messing with parsing etc.
Just make sure you properly encode the entire comment (according to the context - see my answer on this here http://stackoverflow.com/questions/53728/will-html-encoding-prevent-all-kinds-of-xss-attacks#70222)
(btw I just discovered a good example of custom syntax right there... ;-) )
As also mentioned, restrict the file extension to jpg/gif/etc - even though this can be bypassed, and also restrict the protocol (e.g. http://).
Another issue to be considered besides XSS - is CSRF (http://www.owasp.org/index.php/Cross-Site_Request_Forgery). If you're not familiar with this security issue, it basically allows the attacker to force my browser to submit a valid authenticated request to your application, for instance to transfer money or to change my password. If this is hosted on your site, he can anonymously attack any vulnerable application - including yours. (Note that even if other applications are vulnerable, its not your fault they get attacked, but you still dont want to be the exploit host or the source of the attack...). As far as your own site goes, it's that much easier for the attacker to change the users password on your site, for instance.