Help with Text alignment?

Hi,
I am having some serious trouble and have no idea whats going on… In the theme that I downloaded, the images sit inline with the text perfectly and it looks lovely. On MY blog, it doesnt work that way. I have made a lot of changes to the design but NOTHING to the coding as a) I have zeroo clue about coding – zero! and b) I dont want to change it.
I have even tried restoring the original to see if I had accidentally changed any of the coding my mistake but the same thing happens.
This is what it is supposed to look like (note the top posts and the mag posts):
http://www.wpdaddy.com/demo/music-magazine.html
and this is what my site looks like:
http://barkforrights.com/

See the difference in the images inline with the text? It doesnt make a difference if the image is small, large, square, rectangle – nothing works. I just want it to look like it does in the theme demo. PLEASE HELP!

(thank you!)

PS- I have no idea what version of wordpress I am using as I cant find where it says that? But it doesnt tell me to update so I *assume* I’m using the latest version?