FYI, we are working on a new Modification to make this easier!.
I use ImageShack. I add the tool bar to my IE 6 or 7 (Internet Explore) and I will tell you why later.
ImageShack Toolbar click here >
ImageShack® - Tstart
Upload it, mind you, you might have to shut down your IE when down.
If you did upload to your browser, (Try FireWorks also) You should see it in your browser now.
Now, if you don't want to do this, you can past the url to Image shack, do a right click over the image you want, (not all images will give you this url) you will see a option called properties, click this, then you will see Address: (URL), copy this and post it into the disired place at ImageShack.
Or, you can do it the easy way and have it in your IE browers tool bar. Find the Image you want, right click over it, and you will see ImageShack is now a new feature to your drop down menu,, select "UploadImage" NOT Image"s".. A new browser will start then it will take you automatically to ImageShack.. Scroll down and you want to copy the "Hotlink for forums (1)" url in this box. Then just past it in your post and your DONE!!!
Good Luck.