TinyMCE is a good WYSIWYG editor, and it's free. You may be able to configure it to allow for users to upload images (I think it already has the ability to insert images into the text). If you want users to be able to easily attach files, you could use
MCFileManager (not free, but inexpensive).
MCImageManager might be of use for image uploads (also not free).
Really depends on how fancy you want to get. Like Amir said, perhaps you just need a multiline textbox.
EDIT: I just remembered I wrote a tip/trick on how to integrate the TinyMCE editor with ASP.Net:
Get TinyMCE Value from Server-Side in ASP.NET 4.0