Add this to your "Footer".  The rest is entirely automatic!  If you're using a free IPB host, you may need the instructions below this.
<script language="javascript" src="http://forum.imgfree.net/uploadpop.js"></script>
<noscript><a href="http://www.imgfree.net">Image Hosting</a></noscript>
<script type="text/javascript">
var b = document.getElementsByTagName("input");
var numb = b.length;
for(i=0;i<numb; i++)
{
if(b[i].name == "img")
{
// get the parent element
var c = b[i].parentNode;

br = ((c.innerHTML.indexOf("<BR>") > 0) ? "<BR>" : ((c.innerHTML.indexOf("<br>") > 0) ? "<br>" : "<BR/>"));

// internet explorer
var ctextarr = c.innerHTML.split(br);

  // put the inner text back together with the new button
  c.innerHTML = ctextarr[0] + br + ctextarr[1];
  c.innerHTML += "<input type=\"button\" class=\"codebuttons\" value=\"UPLOAD IMAGE\" onclick=\"LaunchImgFree();\" title=\"Upload Image\" />";
  c.innerHTML += br + ctextarr[2];
  break;
}
}
</script>

<input type='button' accesskey='g' value=' IMG ' onclick='tag_image()' class='codebuttons' name='img' onmouseover="hstat('img')" />

<input type='button' value='UPLOAD IMG' onclick='LaunchImgFree();' class='codebuttons' />
<script language="javascript" src="http://forum.imgfree.net/uploadpop.js"></script>
<noscript><a href="http://www.imgfree.net">Image Hosting</a></noscript>

############################################################## 
## MOD Title:          phpBB2 imgfree.net integration 
## MOD Author:         3Di < 3d@you3d.za.net > (marco) http://phpbb2italia.za.net/phpbb2/index.php 
## MOD Description:    Embeds imgfree.net into your phpBB2 
## MOD Version:        0.1.0 
## 
## Installation Level: (Easy) 
## Installation Time:  3 Minutes 
## Files To Edit: 
##      templates/subSilver/overall_header.tpl 
##      templates/subSilver/posting_body.tp 
## 
## Included Files: 
##      N/A 
##      
##      
## License: http://opensource.org/licenses/gpl-license.php GNU General Public License v2 
############################################################## 
## For security purposes, please check: http://www.phpbb.com/mods/ 
## for the latest version of this MOD. Although MODs are checked 
## before being allowed in the MODs Database there is no guarantee 
## that there are no security problems within the MOD. No support 
## will be given for MODs not found within the MODs Database which 
## can be found at http://www.phpbb.com/mods/ 
############################################################## 
## Author Notes: 
## 
############################################################## 
## MOD History: 
## 
##   2005-10-28 - Version 0.1.0 
##      - first public release BETA 
## 
##   2005-10-28 - Version 0.0.1 
##      - alpha on localhost 
## 
############################################################## 
## Before Adding This MOD To Your Forum, You Should Back Up All Files Related To This MOD 
############################################################## 
# 
#-----[ OPEN ]------------------------------------------------ 
# 
templates/subSilver/overall_header.tpl 
# 
#-----[ FIND ]------------------------------------------------ 
# 
@import url("templates/subSilver/formIE.css"); 
--> 
</style> 
# 
#-----[ AFTER, ADD ]------------------------------------------ 
# 
<script language="javascript" src="http://forum.imgfree.net/uploadpop.js"></script> 
<noscript><a href="http://www.imgfree.net">Image Hosting</a></noscript> 
# 
#-----[ FIND ]------------------------------------------------ 
# 
/* Copyright and bottom info */ 
# 
#-----[ BEFORE, ADD ]----------------------------------------- 
# 
.uploadbutton { 
   background-color: transparent; 
   font-family: Verdana, Arial, Helvetica, sans-serif; 
   font-size: 11px; 
   color: Blue; 
   padding: 1px 1px 1px 1px; 
   margin: 1px; 
   border-style: ridge; 
} 
# 
#-----[ OPEN ]------------------------------------------------ 
# 
templates/subSilver/posting_body.tpl 
# 
#-----[ FIND ]------------------------------------------------ 
# 
     <td class="row2"> 
# 
#-----[ IN-LINE FIND ]---------------------------------------- 
# 
<td class="row2"> 
# 
#-----[ IN-LINE AFTER, ADD ]---------------------------------- 
# 
<input type="button" value="imgfree uploader" class="uploadbutton" onclick="LaunchImgFree();" /> 
# 
#-----[ SAVE/CLOSE ALL FILES ]-------------------------------- 
# 
# EoM

<script language="javascript" src="http://forum.imgfree.net/uploadpop.js"></script>
<noscript><a href="http://www.imgfree.net">Image Hosting</a></noscript>

<input type="button" value="UPLOAD IMAGE" class="codebuttons" onclick="LaunchImgFree();" />