If you want users to be able to insert images, you need to allow them to upload the image to the server. Then they can insert the image like normal.
I believe there is a module that gives users something a bit like a home folder where they can store images. It should also integrate with WYSIWYG so they would be able to select the image am insert it without knowing about urls etc. It's been quite a while since I saw it and never used it, so you need to do some investigating. But I think it would just what you are looking for.
It might have been a demo of one of those two I remember having seen. In any regard you should be able to get what you want with one of them.