The correct workflow for importing an image into PS Touch:
From the project selection UI: Tap the "add image" icon in the lower middle right.
From the workspace UI: Tap the "add image" icon in the upper left, 2nd icon from the upper left (it looks like the same exact icon as in the project selection UI).
Remember that, in either case, when importing images on the device itself, the desired images should reside in the Photos folder on Android and Camera Roll on iOS. (Going from memory on the latter.) They should also be in an image format such as JPEG.