Image does not post to blog itself, only to thumbnails

How are you trying to display the Post Image in your Post? They aren't added to the Post Body automatically. The Post Image field simply allows the user to upload an image that is added to the Media Library and assigned to the Gallery for that Post. It doesn't automatically get inserted into the actual Post Content, those are 2 different things.

If you want to add it to your Post Body you need to either edit your theme template file and add code to output the gallery OR output the first post image for that post wherever you want it to display.

OR you can use the Post Template capabilities of the 1.4 release to configure your Post Body content and output the Post Image. You can find the Post Template area by editing your Post Body field and it is one of the options. The Post Template is similar to how you create a Notification, only it is used to create the Post Body. You would use the insert form field drop down to then insert the Post Body field (so the actual body field content is used) and then also output the Post Image field and select the size and alignment.

This Post Template is then processed when the post is created and the Post Body is created from it.

If you turn on the Post Template functionality by selecting it, what this means is you then build the Post Body content using form field variables and markup you add. So if you want the actual field value for the Post Body to be included when the Post is created you would have to insert that form field value when you create your Post Template. So from the Insert form field drop down be sure to select the Post Body field so that it is present.

To insert the Post Image field you select the Post Image from the Insert form field drop down. It will then insert a token into the Post Template for the Post Image that will be replaced when the form is submitted with the actual Post Image. When you select the Post Image field it will give you a second option to select the image size, etc.