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The term "hotlinking" is when Free Image Hosts, such as; Image Shack, PhotoBucket, Webshots, etc. allow you to store images on their server and allow you to direct link the hosted image files on forums or other websites. One of the most common occurrences of "hot linking" is when people are forum posting and they hotlink pictures from another website.
Some disadvantages of hot linking worth considering are that the webpage generally loads slower when you link to images stored on a different web hosting server than the webpage is hosted on, and the owner of the image has full control to disable hotlinking, or delete, rename, or worse yet, do a "switcheroo" (i.e., switching the file name to be another image which is sure to cause the hotlinker embarrassment) of the hot-linked image.
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