Creating quality html craigslist ads doesn't require you to know any html or host your own website. Keep in mind that Craigslist will not allow you to upload images in certain categories. Photobucket and Classified Ad Wizard can easily step in and fill the void.
Simply create a free account on Photobucket's website. It's fairly straightforward and user friendly. Once you create your account, you can start uploading your photos. If you're uploading a lot of images, you can hold down the control key to select multiple images.
After your images have been uploaded, you can then mouseover the images from the dashboard. You will then be given four options. If you're using the wizard, you only need to click the "direct link" field. This is the location (url) of the image. Once, clicked, the image is automatically copied to your clipboard.
From that point, all you need to do is click the image icon in the Classified Ad Wizard template that you're working on. Simply right-click & paste the link into the popup box. Your image should now be inside the ad.
You can also make your images clickable. That is, if someone clicks on the image, he/she would then be taken to your website. This is especially handy when you embed a button into your image and are offering a free download. To accomplish this, make sure you have clicked on the image. A border should be displayed with the options to resize the image. Then, click the chain link above the add. Enter your website's url into the popup box. Now your image is also a link inside your ad.
Remember, Craigslist does not allow you to wrap text around your images. Their server will strip out the styling that makes this happen. Instead, you can put the image in the right sidebar assuming you're using a two column template. You can also use images that are wide.