After launching the Instagram app, select the Camera icon in the center at the bottom. Select the icon to the right of the Camera Capture button at the bottom to bring up the iPhone's Camera Roll. Select the photo you want to add to your Instagram with a crop option. Select Crop at the top right for the selected photo and next you can add the desired photo effects to the selected photo and after selecting the effects if any, select Next at the top right. From there you can share the photo with FaceBook, Twitter, Tumblr, foursquare, Flickr, or send via email.
With a photo selected in the Camera Roll, select the Share icon at the bottom left of the selected photo. The share options are Mail, Message, Photo Stream, Twitter, FaceBook, Assign to Contact, Print, Copy, Use as Wallpaper.
And you can add a photo direct from the FaceBook app and direct from the Twitter app.