Be sure you clicked on Permalinks and then save, before adding a portfolio item.
Next, click on Portfolio in your menu to the left.
Add new.
Your featured image is what will appear on the portfolio page.
Whatever you type in the post area will appear once your portfolio item is clicked on.
You can then link to your Portfolio page by adding a custom link to your menu that goes to
http://YOURSITE.com/portfolio
Here are a couple of screenshots from the Modern Blogger Demo site, the Jane, and Swank theme portfolios work exactly the same.
