When editing e.g. a blog or newsletter article, you sometimes want more than just the main image.
There are two different ways of adding and placing images in an 'ad hoc' kind of way.
1. Use the 'insert images using IMCE file manager' button (the usual image button) to select an existing image in the filesystem or upload a new one. Then you can resize it by dragging around the corners. To allow text to flow around it, select the picture and then use the "Styles" drop down in the toolbar to select one of the "Pull Right" or "Pull Left" styles. The picture in this post has "Pull Right".
2. Use the "insert from media library" option to select an existing media image or video, or insert a new one. These are a slightly "higher order" thing than just putting in the image itself, which maybe be what you want, but not if it's a one-off image that is only for this posting.