Choose the Load button in the Design Manager – Item or Component - Picture tab

Double Click the Pictures Directory/Folder in the Windows browser window

NOTE:  you may need to go under C:\Users\Username (of the Computer) to find Pictures:

Double Click iPhoto Library

Double Click the Masters folder

Double Click the year the picture was imported/saved into iPhoto

Open the Month

Double Click the date the picture was imported/saved into iPhoto

Highlight the Picture you want to Import/Load into DM

Click Open

Click OK to Save inside the DM PIcture tab