I have been using Photobucket FOREVER. So long that I actually made the decision to purchase a pro account there. There is a 5mb file size limitation and multiple file type support. Thats along with unlimited bandwidth, so my images never go down, which has happened plenty of times. Not to mention bulk uploading and/or FTP access. And it only cost me $25 for a year.

You have to weigh out what you need and what you think you need. I am perfectly content with what I get out of photobucket, even though its not a super-duper flickr pro account. And on the other hand, you cant expect to get professional results from free services. Image compression is essential to keep storage space and bandwidth low just to keep it what it is, A FREE SERVICE.