Edit any usergroup that you want to allow them to use the bbcode. If its a custom usergroup then thats probably why its not working. You need to enable it.
Edit the group, and find Allow Image BB Code and make sure it has YES checked.
If that option is not there, then you should delete any unnedded xml files in the includes/xml/ folder or reupload the default files from the vb folder you download from the members area on vbulletin.com.
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