Currently in order to 'post' a picture it must already be on a site that you can reference. Ok, in english...
You can't post any pictures that aren't already on a website somewhere. I use my own web site and then just referenece the url to the specific picture to 'post' it here.
This means that everyone's pictures aren't sucking up room on doug's hard drives. If you pay to have your site hosted then you also pay for storage room. The more pictures you have the larger your hard drive storage space requirements and hence the larger your monthly bill.
In terms of a graphic program you can use to reduce the size of the file, the size of the picture, etc there are two that leap to mind.
Try
Ifran View. This is also a good picture viewer to use in general. The latest new graphics manipulation program comes from no other than Google. It's called
Picasa 2. Both are free to use programs for now, though who knows where Picasa will lead to.