In Avery Design and Print Online, click the "From My Computer" button on the left under images. When it opens the Finder window, scroll down on the left hand pane in Finder and under the "Media" section click Photos. You can then navigate in the right hand pane to select the photo you want.
If you have trouble with that, another option would be to go into iPhoto before you go to the Avery site and go to the photo you want and then use the File Menu Export command to export a copy of the picture to your desktop (or other location) and then in Avery just navigate directly to that file.
Here's what works for me -
Open up Avery DesignPro (1.0.0 for me)
Select a sheet format (I use 8253 for mailing labels)
Click on one of the templates
Make sure "Edit Panel" is selected and not "Page Preview"
Delete whatever isn't needed
Drag and drop a jpg image via Finder to the Panel
You can stretch the jpg to size and shape as needed
Can also add
I've been doing this for quite a while. Get a crash of DesignPro occasionally but no big deal.
Hope this helps.
You know, for us oldtime Mac folks - my first one was a Mac Powerbook 180 - using drag and drop is second nature. I always try that first in many situations and only if it doesn't work go to the menu business of "insert" or "import" or whatever.
My buddy who has always used a Windows machine, now a Dell something, is incapable of using drag and drop. Menu commands only. Feel sorry for him.
I maintain a list in Numbers. When I print labels I use the Numbers File menu Export command to export the file to an Excel format which Avery Design and Print Online will import. As the name indicates the Avery part is done online. http://www.avery.com/avery/en_us/Templates-%26-Software/Avery-Templates-and-Mac. htm?int_id=templatesandsoftware-mac