There are several things you should look at to get the pictures with posts:
1) Make sure your board is set up to side view:
$theme['post_format'] = "side";
2) Then make sure that picture viewing is on:
$theme['PictureView'] = "on";
3) Finally, set the picture posts to on as well:
$theme['PicturePosts'] = "on";
Also, it looks like the default for PicturePosts in the w3t_Users table may be set to off. If you want that on, by default, so that everyone who signs up has it set to on, then run the following command from your mysql command prompt (remember, anytime you make significant changes to any table, always be sure to backup the database!!!)
ALTER TABLE w3t_Users MODIFY U_PicturePosts char(3) DEFAULT 'on';
That should help you out.
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Shalazar
www.charisma-carpenter.com