The picture system is working perfectly, you are not using the correct image URL. Here is what you used:
http://www.google.com.au/imgres?q=lilycove+city&hl=en&biw=983&bih=627&gbv=2&tbm=isch&tbnid=-zYhFYrxivHbIM:&imgrefurl=http://www.pokezam.com/games/advance/emerald/walkthrough/22-lilycovecity.php&docid=4fbhqchI7mcncM&imgurl=http://www.pokezam.com/games/advance/emerald/walkthrough/22-lilycovecity/map.gif&w=1280&h=640&ei=NfckT8GdIqSSiQfzp9nYBA&zoom=1
That is not an image, it's a page on Google. You need to either right click and click "Copy image URL", or click "View full-size image" to open the full image and copy it from there.
However, please don't post gigantic images like that on here because it massively slows down the pages. Just link to them instead.