Image in posts, condition on categories

1) Yes, this is supported with Gravity Forms. You would use a Post Image field for the image to be uploaded. You would then use the "Content Template" feature of the Post Body field to create and configure a content template for the Post Body and insert the Post Image into the Post Body content.

2) Conditional Logic isn't currently supported on the Post Category field. So you can't show/hide a field based on a Post Category selection. However, you could implement this using a standard Drop Down field and then using a little bit of custom code also set the Post Category to the item selected in the Drop Down. We could supply you with a code snippet if you need assistance setting this up.

The field drop down on the content template gets populated after your form has been saved the first time so the fields are created. Once that happens the Insert Form Field drop down will be populated with all the fields on your form.

You would then select the Post Image field, it would display a 2nd drop down to allow you to select which image size and alignment. It would then insert the appropriate content template variable into the content template. When the post is created, the content template would be utilized to create the post content.

The demo is 100% functional due to the fact we have to disable some features and functionality because of the user access necessary to utilize it. Demos are hard with WordPress products because users will be malicious.

Currently only one Post Body field is supported on a single form. The Content Template doesn't currently support conditional logic within it. It is a feature we plan on adding, but we will have to create our own markup language for that to work properly. So you may have to use 2 different forms depending on what you are trying to do.