First you need to set the image and thumbnail sizes via the component options.
Please note that the maximum image size possible on your server will be restricted by the upload_max_filesize setting in your php.ini, so do not set it larger than this limit.
The image upload has a browse button that allows you to select a file from your computer to upload
Now when you save your auction item, it will upload your file, and resize it and create a thumbnail.
This will create two files in /images/com_bfauction_plus folder in the form:
Itemidimgsequenceno.jpg (300 x 400 pixels main image because max image height parameter is 400 and it will resize proportionally). Eg. 11img1.jpg for the first image for item id 11, 11img2.jpg for the second image for item id 11, etc.
Itemidimgsequenceno_t.jpg (68 x 90 pixel thumbnail, since our thumbnail image height parameter was 90 and it is resizing proportionally)
Now on the front end, the item listing view shows the thumbnail
When you click on this the larger image is shown in a popup window
And on the bid page, the main image is the larger version of image 1, with the thumbnails of images 2,3,4 & 5 shown. When you click on any of these, a popup window will allow you to look at the larger version of all the images.
Now when you edit an existing auction item, it shows the thumbnail image, with a delete checkbox. If you click the delete checkbox and save the item, the image will be deleted.
You could also potentially browse for a different image to replace the current one.
If you try to upload an image that is larger than the max image size parameter, it will tell you that your picture is too big and it will not upload that image.