When at ImageShack website, go to the "My Images" page where all of your uploaded pictures appear, click the info icon ("i") on the picture you want to use and a little popup (as in modal window) will come up with various embedding details. Copy the direct link part and paste it here using the image icon (8th icon from the left).
For example if you want to simply embed a full size picture here it should be like this:
In case you want to deploy thumbnails that show the full size picture on click you should use it like this:
For ImageShack, thumbnails have the exact same URL with full size picture and the only difference is an added ".th" at the end before the picture extension (in the case above the extension being ".jpg").
So in order to use thumbnails properly, instead of
Personally, I believe it's better to use thumbnails when showcasing lots of pictures on the same page for faster page loading times of course. If you want to use just a couple of pictures in a post, I guess there's no need for that.
I hope it's clear enough.
P.S. I'd rather stay away from Internet Explorer, latest versions of Chrome and FireFox are decent enough.