Joomla does have a built-in SEF function. To activate it you need to login to the Admin Panel then open the "Global Configuration", on the right you should see a section about SEF URLs. Change all the options to Yes and Save. Now you need to rename the "htaccess.txt" file in the Joomla directory...
Welcome to x10Hosting Lunge. I hope you enjoy your stay with us, and get that problem sorted.
I have no idea why images aren't being uploaded correctly, but I think it must be a problem at your end (Try using FTP).