I like FCKeditor a lot. It's probably the most powerful and stable free WYSIWYG editor around. Definitely better than TinyMCE.
But the image uploader/attachment is not very intuitive or easy.
Why make the process so complicated?
Perhaps you can learn something from Google Apps Sites ...
its WYSIWYG editor is simply fantastic and attaching images is a breeze.
Attached are some screen shots showing how easy it is to attach image in Google Apps Sites editor.
Click Browse to pick an image file from your local machine
Click Add Image
http://img504.imageshack.us/img504/3310 ... es4xd0.jpg
http://img504.imageshack.us/img504/4366 ... es5ha1.jpg
Can FCKEditor do something similar?
Can you beat Google Apps Sites image attachment?