To Edit a picture in FrontPage click it once to select it and the Picture toolbar will appear.

The Picture Toolbar has lots of useful features but it's still not as good as a real photo-editing program, like the one that comes with FrontPage (Photo Editor).

To edit a picture in a separate program, double click it.
If FrontPage tells you that it has no Picture Editor assigned, clickok, then select Tools | Options, click the Configure Editors tab,click the Add button, and then in the 'Add Editor Association' dialog box, enter the file extension, the name of the editor, and the location of the program. Which should be:
C:\Program Files\Common Files\Microsoft Shared\PhotoEd