If you plan to use the RadEditor with its default configuration, then you only need the Lite version. It offers the all the functionality of the original MOSS rich text editor so you will not lose anything. The main advantages in the Full version are that you have access to a greater number of tools and modules. However, some of those tools (like the Flash and Media managers) are not usable in lists so you will not need them anyway.
Regarding your question about uploading images - this feature depends on the user permissions for the specific list you are browsing. If the currently logged in user has permission to create list items, then you will be able to upload new images.
the Telerik team