Type your annotation into the box. As you can see, there is a basic text editor that allows you to add hyperlinks, basic formatting (italics and bold), and use bullet points or numbered lists. If your course coordinator has imposed a word limit on the annotations, this will also appear in the pop-up box.
Click OK to save your annotation. The annotated section of image will now have a box drawn around it, and the annotation itself will appear in the right-hand margin: