To upload images and other files, you got more options. Many modules provide the option to directly upload files during creation of a content element of that module (e.g. at the image-module). [screenshot]
In general you can manage and add your files via the fileupload module (menu > modules > all > fileupload).
You can either add files with the file-browser (for this click on add files...) or you can add files by dragging them into the upload-area of the file-uploader (this is also possible in the frontend).