Looking for WYSIWYG editor and found that FCKeditor is not working well and also outdated ! CKeditor is the successor, installation does not require WYSIWYG module.

To get you WYSIWYG editor with image attachable feature (well, IMHO attaching image is must have feature!) you need

• CKEditor
• IMCE

Setting up IMCE to use with CKEditor, here is steps

• Go to Home > Administer > Site configuration > IMCE
• At "Role-profile assignments", assign Role that is allowed to use IMCE profile (e.g. only Authenticated user that is allow to use IMCE)
• Go to Home > Administer > Site configuration > CKEditor
• Select CKEditor profile you want to configure
• At "Basic setup", select "Role" that will be allowed to use this profile
• At "File browser settings", select "File browser type (Link dialog) = IMCE"
• Done !

Attaching image is a bit tricky, not friendly at all. You need following steps to upload file from your PC for using in CKEditor

• Click "image" icon
• Click "Browser" button, new window wil be opened
• Click "Upload" link (the link at is middle top of new window)
• Click "Choose" button, this is to browse for a file in you PC
• Click "Upload" button, it will say that "Uploading ..." in log window below
• Hit F5 button to refresh (yes, it does not have auto-refresh)
• Your image should be in the list in IMCE window, select it and click "Send to ckeditor" link
• Done ! you are back to CKEditor with you image

Thanks Drupal Community for suggestion.