I found the area where you can add smilies (in the administration panel) but I am unsure how to "upload them"....  there is a http:// in the box, what do I do to upload them?    I don't know where to find the http:// of the individual smilie.

Please help with step by step instructions on how to add an additional smiley!  

To the best of my knowledge, you can't host them on the forum themselves. You just type in the URL where the image can be found.

What we did was to go to an image host, such as imageshack (www.imageshack.us) and upload the smileys there, then type the url of the smileys that imageshack gives you in the http:// box you've already seen.