Currently there are two ways to insert image in DYM Newsletter: the image widget and the text box widget.
The image scales the image to fill the entire width of your newsletter and there isn't really a way to change that. Images are uploaded with the uploader tool -- you hit upload, select an image on your computer and BAM it's on your newsletter!
Text Box Widget
This method will allow for finer grain control of scaling and placement, but requires the image to be hosted somewhere else. In order to use it, simply upload your image somewhere else on the internet (your church website, your public dropbox folder, etc), then grab the link and place that in the "source" box in the text box area. From there you can scale, place the image and even put it inline with text.