I have another question

What directory do I upload images into? When I upload them into the mysite.com folder, they don’t work.

its mostly up to you. What I did is create an image folder after the domain folder. So if your domain was http://www.example.com the image folder would be example.com/image.
On your web page you then need to point the images to that folder for them to load.
So Sample test image
Would load an image called test.jpg that is in a folder just below that web page. That has no border and is 100X100 in size.
This is called a relative address. This web page will load that image on any web site as long as the folder image and image called test.jpg is located just below the web page.
However is you used an absolute address like Sample test image. Then the image would only load if it is found on the web site example.com.