Launching Next has discovered 2 free image hosting startups.
TinyPic - Free Image Hosting, Photo Sharing & Video Hosting
Tinypic is a photo and video sharing service that allows you to easily upload, link and share your images and videos on MySpace, eBay, blogs and message boards. No account required, upload your photos and videos today!
Postimage.org - free image hosting / image upload
Provides free image upload and hosting integration for forums. Free picture hosting and photo sharing for websites and blogs.