The private messaging you see here on geeklog.net is actually a plugin that is not part of the standard Geeklog install.
Posting of images is only allowed for users of the Story Admin group - normal users can't post images at all.
If you haven't done so, check out our demo site - currently located at demo.spacequad.com, due to DNS problems (it would be demo.geeklog.net normally). This has only the standard Geeklog install plus the Forum plugin.
bye, Dirk