Try doing following steps.
1. Download CKEditor and CKFinder. Integrated code may be available on http://dwij.co.in/ckeditor-ckfinder-integration-using-php/
2. Put extracted code of both in one folder inside xampp as below.
3. Create index file (index.html) which will be containing the editor as below code.
    <html>
    <head>
    <script type="text/javascript" src="ckeditor/ckeditor.js"></script>
    <script type="text/javascript" src="ckfinder/ckfinder.js"></script>
    </head>
    <body>
        <h1>CKEditor CKFinder Integration using PHP</h1>
        <textarea id="editor1" name="editor1" rows="10" cols="80"></textarea>
    <script type="text/javascript">
    var editor = CKEDITOR.replace( 'editor1', {
        filebrowserBrowseUrl : 'ckfinder/ckfinder.html',
        filebrowserImageBrowseUrl : 'ckfinder/ckfinder.html?type=Images',
        filebrowserFlashBrowseUrl : 'ckfinder/ckfinder.html?type=Flash',
        filebrowserUploadUrl : 'ckfinder/core/connector/php/connector.php?command=QuickUpload&type=Files',
        filebrowserImageUploadUrl : 'ckfinder/core/connector/php/connector.php?command=QuickUpload&type=Images',
        filebrowserFlashUploadUrl : 'ckfinder/core/connector/php/connector.php?command=QuickUpload&type=Flash'
    });
    CKFinder.setupCKEditor( editor, '../' );
    </script>
    </body>
    </html>
so your folder structure will be something like this:
htdocs
|_integrated
    |_ckeditor
    |   |_config.js
    |   |_...
    |_ckfinder
    |   |_config.php
    |   |_...
    |_uploads
    |_index.html
Now open file config.php inside ckfinder & make following changes:
function CheckAuthentication() {
    // WARNING : DO NOT simply return "true". By doing so, you are allowing
    // "anyone" to upload and list the files in your server. You must implement
    // some kind of session validation here. Even something very simple as...
    // return isset($_SESSION['IsAuthorized']) && $_SESSION['IsAuthorized'];
    return true; // not good option though; go for sessions
}
$baseUrl = 'http://localhost/integrated/uploads/';
$enabled = true;
$config['SecureImageUploads'] = false;
$config['ChmodFolders'] = 0777 ;
 
- Now open url 
http://localhost/integrated/ and try uploading image.