Well, I'm not good at explaining things, but I'll give it a go.
Click the "Insert Hyperlink" button, and [ url=http://[/url ] should appear, without the spaces. Type in the link after the double forward-slashes, and end it with a square bracket (]). Then type in the word you want to turn into a link.
For example, my above post looked like:
[ url=http://forum.taijitu.org/index.php?action=dlattach;topic=1799.0;attach=501;image]this[/url ]
but with no spaces in.