How do I put jpg images or photos into posts?

What I am trying to do is create a portal page using a forum. Within the forum I am making a locked topic to display something. I used a word document. I cut and pasted it into the thread. Only the text showed up. The jpg image did not show up. Is there an extra step that is required? Does the image have to be saved using that ftp stuff?

Well first the file has to be somewhere that it can be referenced. Either on your site or some other site that cann be accessed via the internet.
One thing you could do is add the file manager feature and upload the image per post. But then also you would need to make changes in the control panel.
You can try a test upload post in the test forum here.

http://www.ubbcentral.com/forums/ubbthreads.php/topics/220537/Test_image_post.html#Post220537

file manager feature? Is that something within the control panel?

Yes it is but it will be in several places.
Control Panel » Feature Settings-tab-attachments

Control Panel » Display Options[-] Topic Display Options
Max Size for inline uploaded images

Control Panel » Forum Permissions
Maximum size of file attachments