I think TinyMCE is a great widget and I've been using it for a long time. The only thing I'm missing there is the ability to upload an image (or other media file) from my computer.
I'm sure you can find tens of there on the Internet but for what I need the best choice is TinyBrowser. It has a really simple frontend and backend application which uses PHP for images manipulation (storing, resizing), Flash for uploading and a few HTML pages.
I don't know why the author didn't put live demo anywhere so you can't see how it works and you can't try it.
For me personaly I had to modify the
config_tinybrowser.php file a little bit, because the original script uses Document Root as the root path where it stores all media files and that caused some errors and warnings (I'm running PHP 5.3.2 on Ubuntu).
$tinybrowser['docroot'] = 'absolute/path/to/my/media/folder';
Unfortunately, TinyBrowser is no longer published for free but you can buy a single domain licence for only 3 EUR.
Probably if you are looking for an upload plugin only for your personal use, you'll choose another plugin but if you're sure this is the right plugin for you, 3 EUR is not that much.