Yes, they are uploaded directly from your computer. The images must be smaller than 200Kb in size.
Click the "New Image" at the top of the forum to start the process. Enter your subject and a blurb about your car, then click the "image manager" link at the bottom. A pop-up will appear. Click the "browse" button and search your hard disk for the image you want to add, highlight and click "open". That will return you to the pop-up where the link to the image will be in the field next to the browse button. Add any commentary text you want for that image in the box above then click "add image" button. Repeat the process, clicking the browse button through clicking the add image button for the other images you want (4 maximum). Then click "Done adding files". That will return you to the original entry screen. Click the submit button and you're done!