I use picasa picture pro through gmail, When you are in your gmail account you click on photos and then your dropbox, Then on the right hand side of the screen Click on link image only then you choose your size and then copy that url and then follow the directions pville gave you, that is how I do it there maybe other ways. I love picasa especially for doing screenshots of my phone I just use the upload feature for the phone app
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I just have a ten yr old photobucket acct. Upload the pic, copy the img code, and follow pvilles instructions.