Ash already said that images can't be direct-linked when they're over a certain size, but when I tried to post a couple of icons in a submission thread, I kept getting the message "Dynamic image posting is not allowed". Does this mean that you're not allowed to post over a certain number of images (I tried four, all 100x100 since they're icons), or is it just a scripting error?
It works now. If anybody has any problems posting images, post here with the exact URL that you're putting in the IMG tag. Dynamic images are disabled because they can cause security issues, but if it's just a normal image (it should be, especially if it's just something like an icon) then you shouldn't be getting that error.