doc: update vscode doc (#15064)

---------

Co-authored-by: ParthSareen <parth.sareen@ollama.com>

docs/integrations/vscode.mdx

@@ -2,33 +2,84 @@
 title: VS Code
 ---
 
-## Install
+VS Code includes built-in AI chat through GitHub Copilot Chat. Ollama models can be used directly in the Copilot Chat model picker.
 
-Install [VS Code](https://code.visualstudio.com/download).
 
-## Usage with Ollama
+![VS Code with Ollama](/images/vscode.png)
 
-1. Open Copilot side bar found in top right window
+
+## Prerequisites
+
+- Ollama v0.18.3+
+- [VS Code 1.113+](https://code.visualstudio.com/download)
+- [GitHub Copilot Chat extension 0.41.0+](https://marketplace.visualstudio.com/items?itemName=GitHub.copilot-chat)
+
+<Note> VS Code requires you to be logged in to use its model selector, even for custom models. This doesn't require a paid GitHub Copilot account; GitHub Copilot Free will enable model selection for custom models.</Note>
+
+## Quick setup
+
+```shell
+ollama launch vscode
+```
+
+Recommended models will be shown after running the command. See the latest models at [ollama.com](https://ollama.com/search?c=tools).
+
+Make sure **Local** is selected at the bottom of the Copilot Chat panel to use your Ollama models.
+<div style={{ display: "flex", justifyContent: "center" }}>
+  <img
+    src="/images/local.png"
+    alt="Ollama Local Models"
+    width="60%"
+    style={{ borderRadius: "4px", marginTop: "10px", marginBottom: "10px" }}
+  />
+</div>
+
+
+## Run directly with a model
+
+```shell
+ollama launch vscode --model qwen3.5:cloud
+```
+Cloud models are also available at [ollama.com](https://ollama.com/search?c=cloud).
+
+## Manual setup
+
+To configure Ollama manually without `ollama launch`:
+
+1. Open the **Copilot Chat** side bar from the top right corner
    <div style={{ display: "flex", justifyContent: "center" }}>
      <img
        src="/images/vscode-sidebar.png"
        alt="VS Code chat Sidebar"
        width="75%"
+       style={{ borderRadius: "4px" }}
      />
    </div>
-2. Select the model dropdown > **Manage models**
+2. Click the **settings gear icon** (<Icon icon="gear" />) to bring up the Language Models window
    <div style={{ display: "flex", justifyContent: "center" }}>
      <img
-       src="/images/vscode-models.png"
+       src="/images/vscode-other-models.png"
        alt="VS Code model picker"
        width="75%"
+       style={{ borderRadius: "4px" }}
      />
    </div>
-3. Enter **Ollama** under **Provider Dropdown** and select desired models (e.g `qwen3, qwen3-coder:480b-cloud`)
+3. Click **Add Models** and select **Ollama** to load all your Ollama models into VS Code
    <div style={{ display: "flex", justifyContent: "center" }}>
      <img
-       src="/images/vscode-model-options.png"
-       alt="VS Code model options dropdown"
+       src="/images/vscode-add-ollama.png"
+       alt="VS Code model options dropdown to add ollama models"
        width="75%"
+       style={{ borderRadius: "4px" }}
+     />
+   </div>
+
+4. Click the **Unhide** button in the model picker to show your Ollama models  
+   <div style={{ display: "flex", justifyContent: "center" }}>
+     <img
+       src="/images/vscode-unhide.png"
+       alt="VS Code unhide models button"
+       width="75%"
+       style={{ borderRadius: "4px" }}
      />
    </div>