Normally the image should be attached where the cursor is. I suspect you are using Internet Explorer, such problems most commonly happen there. Can you try this with a different browser and see if it makes any difference?
Can you also let us know your Confluence version?
That can very well cause this, I'd suggest you to remove any customizations temporarily, or if that is easier, install a separate Confluence instance with an evaluation license and try to reproduce the problem there. Otherwise, you are always welcome to open a ticket with us at href="http://support.atlassian.com%20">http://support.atlassian.com where we can assist you to debug this issue.
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