This is a three-parter: Why can you only add one image per post, why only in the JPG format, and why can't we add external images?
Why only one image per post?
Free, unmoderated photo hosting is new for us and we still have to resolve some issues with the current process. We'd like to add support for more images per post in the future--2 or 3 seems like an ideal number. In the meantime remember that constraints breed creativity, a lot of members are doing "photo of the day" posts, which only need one image at a time.
Why only JPG format?
A technical issue. JPG is easier for us to resize and manipulate. We need the ability to resize because often people will upload extremely long images that would distort your page if left untouched. We have to experiment to see how our resizing script works with GIF (animated and static) and PNG images before rolling it out.
Why no external images?
There are three issues with external images:
(1) They often expire, meaning you'll source an image and a week later the image link will be broken
(2) Bandwidth leeching, meaning a lot of webmasters don't like it when you source their images because it drains their bandwidth
(3) Size control, meaning it's a lot harder for us to make sure the image sourced won't be so big that it'll distort the page it's on
These three issues aren't fatal flaws, but they're problems that need to be figured out. Right now we recommend uploading images directly and linking to external images.
