Working with HoMM5 files.

How do I insert a screenshot into a message?

In the advanced editor, there's an option called "manage attachments" (at the bottom). Click on it, then upload the file. You can stop here.
You can also click on the uploaded file; it will open in a new window/tab. Then, copy its HTTP address, click on the "insert image" button, and paste the copied address into the field that appears. This way, the image will appear directly in the post.
You can also upload the photo to any file-sharing service like Radikal and insert the image into the post using the method described above.

What format should the screenshot be in (BMP? JPG)?

It's better to use JPEG, although there's not much difference overall.

PLEASE help me convert this SCREENSHOT into a format that can be inserted here in a message. I'll send the SCREENSHOT to someone, and you send it back to me in the converted format.

I can help if there's nothing complicated about it. Although it's unlikely that someone wouldn't have Paint installed. Unless a friend is using a different operating system than Windows. By the way, you can also use Fraps to take screenshots. It seems more convenient to me.