>The image isn't included in the tab order and doesn't appear when the form is running (unless there is already an image there). I want users to work from the forms and be able to insert an image into the tables from the form.

You can create blank or whatever placeholder image to show in image control before user makes his/her choice. In 'Add Image' button put code

lcNewPicture = GETPICT()
IF NOT Empty(lcNewPicture )	
	Thisform.Image1.Picture = lcNewPicture 
ENDIF	

You can also play with drug&drop if you want.
It's better to keep images as a separate files, because image in general field requeres much more space to store and it's almost impossible to extract image from general field back into file.