The Wikipedia Picture Book is like The Longest Wiki-Story and other collaborative fiction, but with an added twist: each blob of text is the caption of a picture. The whole story will then read like a picture book, or an illustrated narrative.
First, read the story. So you know what's going on.
Next, find an image in the Wikipedia Commons or in the Wikipedia imagespace. Alternatively, set this aside and go explore Wikipedia until you find an interesting image.
Then, add the image underneath the last image. You can either use extended image syntax, or just use the following:
[[Image:file name here.jpg|thumb|none|Your caption here]]
And that's it! You're done! Now either sit back and wait for someone else, or add in another picture.