Where can I get the text editor used here at VanillaForums?

TownFish

I'd like the feature that allows you to upload an image from a computer or drag a file across.

See here:

Also is there a way to make the image appear in the body of the content instead of a link like you see when you post on Facebook?

whu606

@TownFish‌

See this discussion:

http://vanillaforums.org/discussion/27288/text-editor-of-vanilla

The Buttonbar plugin will show the image, but you need the web link to it.

If you want users to be able to upload images, try this plugin:

http://vanillaforums.org/addon/imageupload-plugin