You don't need to have an image content type to upload images and use them in your other content types.
Simply add an image field to your content type and you are good to go. Basically, at uploading an image, its url will appear, and you can then use that url in an in the body of your node.
But there is another way.
You can also use the modules imce,plupload,imce_plupload combined with ckeditor or wysiwyw editor. After correct configuration you will be able to upload images and to manage them with the imce file browser.
Doing so, your content type doesn't need image field anymore, as part of its structure.
I advise you to carefully read the README files if going that second method, because making all of those work correctly need the correct setup, explained in the documentation. It's not click enable and go.