If the original image is too large, it seems it will get quite small on the forum. By resizing (shrinking) the image before uploading it is possible to get a slightly better result, but hosting the image somewhere else and linking to it seems to be the easiest way, unfortunately.
I use a simple resize tool that's embedded within Outlook to resize images...
Right-click on the file, and select "Send To" then "Mail recipient" and an attach files box will appear, enabling a simple file compression/resize. It will then open an email draft, with the compressed image as an attachment, just click and drag it on the desktop or copy/paste somewhere. Voila, a compressed image.