When you’re posting a blog entry using Windows Live Writer, you don’t want your text to be on a separate line from images, text should flow around the image. Achieving that is not too hard. It’s clearest to write all your text first, and then to insert the image. The image will insert at the spot where the cursor is; I recommend that you set it as the first character in your post while you’re getting the hang of it.

Notice that in this screen shot the image is selected and there is a new ‘format’ entry on the tool bar. Click on format

Also note that the text is not yet flowing around the image.

On the Format menu, choose ‘left’ from the Appearance dropdown. This will cause the image to ‘float left’ and the text will float to the right around it.