Explain what you exactly doing and what image you are trying to upload to the site, are you sure you are entering the image url and not the page url? Also, if the image exceeds 1.5mb (I believe it may have been increased to 2.5mb) the image will not display and will need to be made smaller.
Here's a quote from theymos which explains this feature:
bitcointalk.org now runs its own image proxy. GIFs will work now, and images will not be cached. However, images that don't load completely after a few seconds will still not work, and invalid URLs in [img] tags are less likely to work than before. Images must not be larger than 1.5 MB. You are only allowed to download so many images via the proxy before you're banned for a while, but no one acting reasonably should run into this. The proxy can't be used except through posts. Old image URLs will expire after a few months.