I use Option #2 with Photobucket. I find this the easiest was to post images. But like Smokin says; you must not change the images on the Photobucket site or delete them, otherwise they are lost here on the forum. Hovering over an image on Photobucket will cause a drop down to open below the image with 4 options to select. All that is required with Photobucket is to copy the Image Code and paste it directly into the forum message.
Photobucket is free and provides a fairly significant amount of free space but I'm not sure of the limit.