This should be a really simple one.
I cannot workout where I link/add the image location to enable the portfolio to display images - the little images just state 'K2 article without image'?
You go to Components-> K2 -> Items.
Find the article that you want to add the image to. Click on the image tab and browse the server for an image you want to use or upload a new one. Save the article and refresh the frontend. You should see the image you just uploaded.