Uploading images to forum threads

[godtfred]

Is there a setting that can allow users to upload/insert images directly into the forums instead of having to link to images hosted elsewhere?

I have the exact same problem, drives me nuts. Vbulletin forum 4.02 doesn't have a problem with uploading from an url but cannot upload from my pc, it looks like this:

[godtfred]

When logged in as an administrator I have both options, when logged in as a registered user I can only upload from an url. Just one of those things I guess.