Uploading new images is simple. Visit the image hosting service provide website, select browse to find an image that you want to upload and click upload. The hosting website will automatically generate linking image code (URL) to post your images in blogs, email messages or websites (html image) including eBay, ubid, WebTV, Yahoo Auctions, and EZBoard message boards.

Limitations: File size limit 250KB; Monthly Transfer 600 MB; 90-days inactivity limit.
villagephotos.com
IMGSpot - No signup required. There are no limits with the number of images you can upload. Hotlinking is allowed. You may upload .jpg, .png, .gif files. There is no set limit to how much bandwidth images can consume. There is currently no expiration on images.
Limitations: File size limit 650 KB;
imgSpot.com

Limitations: File size limit 1024 KB;
imageshack.us

Limitations: 50 MB storage space; 2500 MB/month bandwidth; 512 KB file size limit;
PhotoBucket.com
ImageVenue - Free large image hosting service.. Users are allowed to upload up to 10 pictures at a time. There are no limits with the number of images you can upload. Hotlinking is allowed. No registration is required. Only jpg and jpeg image formats are supported. Unlimited bandwidth and unlimited storage period. ,
Limitations: File size limit 1.5 MB; Hosted images not accessed for one year will be deleted from their dedicated server.
Imagevenue.com
WebLogImages - Weblogimages.com is another image hosting service, specially designed for people who use blogs (such as Typepad, LiveJournal). The free account of this image hosting service allows 10 MB of storage space and a limit of 200 MB monthly bandwidth.
weblogimages.com

TinyPic.com
Traffic to these image hosting websites has skyrocketed due to the massive rise in blogging activity in the recent months. I personally prefer Google Image Hosting accessible via the Blogger interface or Picasa's Hello software. Hello provides the ability for Blogger.com (also owned by Google) authors to post thumbnail images int heir blog posts that, when clicked, show a full size image.
All free image hosting services have a very similar business model. They cover the cost of running the business by placing text advertisement links or banners on their websites. You can also start your own image hosting website by buying lot of webspace, a google adsense account and a free image hosting script.
Direct Linking is a term referring to when a web page of one website owner is linking directly to the images or other multimedia files on the web host of another website owner (not just linking to a web page on their server which loads the image). If this is done without permission, it is stealing bandwidth and is also known as "hotlinking", "hot linking", "leeching", and "bandwidth theft".
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