The featured image functionality is used mostly to identify the primary image for an article. The featured image is often used on the homepage or for an articles thumbnail image. Below is how you set featured image.
You add a featured image for a post as follows:
1. Click on the Add Featured Image link in the bottom right corner of the post editor
2. Upload a new image or select one from the Gallery
3. Click on the Use as featured image link at the bottom of the pop-up box