When you add this snippet in your template, you need to clear your cache in the performance page. I had the same problem, but with a clean cache, it works well :-)
That may have been it. Not sure actually b/c my cache was turned off, but now I see that the little icon next to "Image URL" works. Could be it's so small I never even saw it before!. I myself don't use TinyMCE, but the clients need it. :)
Anyhow, thank you for your help--it works now! :)
Fred