I use Fotki. you cant hotlink to a free account but for $30 (£15 ish) you get to hot link and literally unlimited space (mine is currently at 114.6 mb but i know of people with 10 times that amount) so $30 is not out the way really
join a ISP that gives you web space, then ask jflowers for his excellent FTP uploader
Alot of sites don't allow hot linking, which means even if you do copy the image address and tag it in a post it won't show up as there settings don't let images to be hot linked.