Your code is basically right except for two points...
3. for each number test to see if it retruns a remainder

from dividing by 2...3...4...5...until half of the number

This means you need to start the j loop with j = 2, not j = 1, since i%1 == 0 for all i.

Also, your use of continue inside that for loop is going to cause problems... that is, it's going to make the loop do nothing. Here's what I suggest...
Code:

for(j = 2; j < (i / 2); j++)
{
if ((i % j) == 0) break; // Terminate loop if factor of j is found.
}
if (j == i / 2) // If loop was terminated due to
// j going beyong loop limits...
printf("\n%d is prime",i);

Continue does not terminate a loop. All it does is force the next iteration of a loop.