A lot of places allow it - these's a bunch in this thread:
http://www.greenguysboard.com/board/...ad.php?t=51317
I like it for programs I trust & have done business with in the past (odds are I'm not going to sign up to a program today & have a hosted banner flying tomorrow)
I'm really liking the Nasty Dollars & Bang Bros hosted ads that rotate with each episode update or allow you to post the last updates from multiple sites.
I've not heard of anyone that allows hotlinking pics or everything from a gallery page (unless you're confusing them with hosted galleries?)