Don--yes you have to select the size. Once you figure out what size looks good to you, just keep using the same size. It is not an issue. Actually, after you select it once, it defaults to the previous size used until you change it. (Updated below with the next post. I made an error. See the correction.)
A couple of things to note. I prefer to use my first method only because it does not show the URL data below the image. It is much cleaner looking to me but as noted by others here, they will use and modify them. It depends on your preference. I guess you can eliminate some of that but I have not completely figured out what in the URL has to stay, and what can go. Others here might be able to help with that, if this is a concern.This can be confusing--so here is a visual of how to do the second method.
1. While in photostream mode, click on the photo that you want to post. It will open the photo as shown below.
2. Click on the curved arrow shown in the image.
3. After clicking on the curved arrow, this comes up. Select the image size.
4. Make sure BBCode is selected.
5. Right click on the URL address.
6. Click on copy.
7. Go to the FSM interface and click on insert. (You can also use the insert icon in the toolbar.)
8. Click on insert image.
9. Paste the link into the source box and click on OK.
10. This is how it looks when you paste the URL.
11. Click on the submit button when you are ready to submit the post. Then the image magically appears. Notice the URL data below the image. You can edit some of that out before you hit the ok button in step 9.