This is a good question because many people posting here must find it frustrating not to be able to illustrate their problem or solution (or at the very least be wondering the same as you). But the fact is that the forum software really lets users down when it comes to posting screenshots etc.. It makes it seem like you can, but actually you can't:
First off, as you point out, while writing your post there is a button for exactly that in the "advanced editor" but it still, after more than 5 months of these forums being live, it does nothing.
Even more confusing for people is that if they drag images into the post then they appear inline and even appear correctly formatted when the post is viewed as HTML but, once posted, all such images are stripped without warning.
Having been thwarted by the first two points, people will naturally upload their screenshots etc. to an image-hoster and then post the URL here instead. This makes things worse though, because the forum software detects a link to a non-Apple domain in the post and automatically flags it for moderation - where it typically stays for many days. To add insult to injury, the only indication of what happened is "Your post is being Moderated", causing many to wonder what they wrote that a moderator pulled their post - understandably some just give up at that point and seek help elsewhere.
Hopefully people will see this and know that they're not "doing it wrong" - it's just the forum-software...
-Max