Thanks again for your help Adeian.

I had never noticed those 2 drop downs below the editor before. I went off and experimented and noticed that on the forums that I've set-up they 2 drop downs only appear if I'm logged in as host. Admin and regular user do not show them.

You are correct that you can then also navigate to the Gallery and attached 1 single file to your reply - as host. This file appears as an attachment and the option to show it as an inline image is not there.

It is of course possible that I have not set-up the "integration" between Gallery and Forum correctly. After you have added those 2 modules to 2 (in my case) different pages, are there more steps that you need to take to tell them about each other and how to work together?

It is my wish, that while editing a new forum thread or reply, that I could upload an image (which would go somewhere into the Gallery (perhaps the user's name) and also then appear as an <img> </img> in the posting. Do you think that I'm expecting too much here?