From the list of people retrieved from the Person lookup tool, you can work with an individual by clicking on a person's name which will take you into the person's profile. Or you can work with any individual or combination of people on the screen as a group using the section of the left navigation bar or by right-clicking.
You can drag and drop files or photos from Windows Explorer onto a person on this list. Dragging a photo onto a person will bring up a dialog asking if you want that file to become the person's photo. Any other drag/drop makes that file an attached file for the person, permanently storing that file in the person's record in the database.