trying to add images to home page

well, I really like this theme but I am haveing a problem trying to figure out how to add images to the home page. Here is a snapshot of what I have.

http://screencast.com/t/iUpnGCCb

and here is the site

http://smsdominator.com/blog

The demo site clearly shows images on the left side of each post.

What am I missing or what am I doing wrong?

Thank you!