Assuming you want the picture to appear in front of your video, you need to be in 'timeline' mode and put your pictures on lower (higher number) tracks as shown below:
This is from MEP 2013 but the principle, usually referred to as 'picture-in-picture', is the same for earlier versions. The default is for pictures to be scaled to as best as possible fill the preview screen. The two above have been adjusted by using the 'Movement effects' >> 'Size/Position' under the 'Effects tab. You can have things change with time using key frame animation as well.
Have you looked at all through the help file or the pdf manual that came with your program distribution? Hope this gets you started -- come back if you have more specific questions.
Regards,
Carl
EDIT: Screen shot now also shows an inserted picture as suggested by Jeff. It is selected, but not seen in the preview because the cursor is over the p-i-p set.
If you simply want a still image to appear at a given point in the video (not "in front of" your video but, as it were, "in place of" your video) simply make a cut (shortcut T) at the exact point where you want the picture to appear, move everything after the cut back to make a space on the timeline, insert your picture at the very beginning of this "space", taking care not to leave any gap. You can then extend or shorten this picture object so it is visible for as you long as you wish it to be. Then, if necessary drag the following video section back so that there is no gap between the end of your picture and the beginning of the following video.
Once the picture is "in place" on the timeline you can add a transition of your choice at the beginning and end of this object in order to create a smoother join video>picture and picture>video, if you want.