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Attach a file

We just installed the FileUpload plugin. In the 'Create new discussion' window, the 'insert image' button only offers the ability to enter in a URL.
What I'd like to do is enable users with uploading an image from their computer.
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The answer is in Users > Roles & Permissions. You have to enable attachment permissions for each user group.
When I attach say a zip file it shows as attached but once saved does not show up. Images only show up if inserted. But can insert a text file as they show as broken. Is this expected behavior?