I've looked into a number of different sites for hosting pictures, and here's what I've found:
Facebook the 720x(up to 720x) image size isn't great - the tie-ins to commenting/news/email is nice. EDIT - Now closer to 1000x1000, sometimes. Still not huge.
Flickr is, for me, an exercise in frustration. Can't upload one file (2.3MB) via the web page. The uploader won't download (it quit twice in mid-transfer) - and even if I could get a picture on there, it wouldn't be full size - and only 200 pictures 'live' at a time - and no more than 100mb uploadable a month (without paying $$). I like the *idea* of Flickr, but can't seem to get it to work.
dotphoto while seemingly being able to upload anything, it only previews at 450px. It's geared toward 'Hosting pics - NOW YOU BUY STUFF 'KAY?'
PhotoBucket is my old standby. The free account allows for images up to 1mb (regardless of dimensions) and has only mini-thumbnails. There is a theoretical 'midsized' thumbnail but it's the large image crammed into a smaller space. Not a 'friendly' place for visitors to browse and leave comments.
ImageShack while I haven't hosted anything personally, I remember something oddly irritating about it. Oh ya. No mid-sized thumbnails again.
Picasa Web Albums
Pros: I have Picasa3. 1GB free space (more with $$), Small, Medium, FULL views (for real!)
Cons: Google takes over the world that much faster...