A page can either hold text, or an image. If it holds text, it can inline an image using the syntax you just saw. You can switch a page from text to image and back following the link at the bottom of the edit page (right below the Save button) where it says either Replace this text with a file or Replace this file with text.
To add an image to a page, you use the following syntax:
[[image/class:name|text|image link target|caption|caption link target]].
Examples:
[[image:Giant.jpg]] [[image:Giant]] [[image/right:Giant]] [[image:Giant|A hill giant goes hunting]] [[image:Giant|A hill giant goes hunting|Giant of the Thunder Forest]] [[image:Giant|A hill giant goes hunting|Giant of the Thunder Forest|Watch the club!]] [[image:Giant|A hill giant goes hunting|Giant of the Thunder Forest|Watch the club!|Club]] [[image:Giant|A hill giant goes hunting|Giant of the Thunder Forest|Watch the club!|http://en.wikipedia.org/wiki/Club_(weapon)]] [[image:Giant|A hill giant goes hunting|http://de.wikipedia.org/wiki/Riese|Watch the club!|http://en.wikipedia.org/wiki/Club_(weapon)]] [[image:http://upload.wikimedia.org/wikipedia/commons/thumb/f/f5/Walter_Crane_King_Arthur_and_the_Giant_Book_I%2C_Canto_VIII.jpg/220px-Walter_Crane_King_Arthur_and_the_Giant_Book_I%2C_Canto_VIII.jpg|A hill giant goes hunting|http://en.wikipedia.org/wiki/Giant_(mythology)|Watch the club!|http://en.wikipedia.org/wiki/Club_(weapon)]] [[image/right:http://upload.wikimedia.org/wikipedia/commons/thumb/f/f5/Walter_Crane_King_Arthur_and_the_Giant_Book_I%2C_Canto_VIII.jpg/220px-Walter_Crane_King_Arthur_and_the_Giant_Book_I%2C_Canto_VIII.jpg|A hill giant goes hunting|http://en.wikipedia.org/wiki/Giant_(mythology)|Watch the club!|http://en.wikipedia.org/wiki/Club_(weapon)]]
The last example from hell was used on this page! 
We also support the standard Creole syntax to inline images: {{name}} and {{name|text}}.