I use http://www.brickshelf.com for free hosting of Lego related photos. They have a companion site, http://www.maj.com that is available for free hosting of any images, not just Lego related.
I created a plugin that allows me to display these folders from in my blog using the images and thumbnails on brickshelf, using the serendipity css for the thumbmails and images, etc.
See an example of it here: [url]http://ffaat.pointclark.net/blog/bs.html?serendipity[folder]=RTL18[/url]
There is a link on the top that takes you to the original Brickshelf page. You can click on the thumbnails and browse through the folder like any gallery.
Another example pointed explicitly to one maj.com folder is here:
More information and download of the plugin here http://ffaat.pointclark.net/blog/pages/bsgallery.html
It provides caching of both the folder contents and the folder description, and needs for your server to be able to download stuff via php.
BTW - hope my use of the serendipity[xxxxx] URL parameters is allowed. It seemed easier to do that than to create my own URL parameter routines....