Hotlinking is the action taken by a person linking directly to a picture(or audio or video) found on a random website, for use in a forum or pages of their own. yes, this is a lot like straight linking, only to a picture, and it takes up a bit more of that precious bandwidth.. which in the grand scheme of the internet, is actually quite a big number to start with.
This is where it gets sticky. This days people, especially hosts, are concerned about the amount of bandwidth that is being used. Usually they make the folk paying for space use, pay for it as a part of their monthly fee. in other words, if a single picture gets linked to and appears on a thousand different forums.. it can get fairly pricy for the original host of the picture. In defense, people have gotten to saying "No hotlinking directly to pictures" on their pages of pictures. and if you do it anyway, you are stealing their bandwidth, which is a no-no. (theres also the danger of the host changing the picture you are linking to... could make for a nasty surprise eh?)
On the other hand, there are places that allow for the linking of pictures.. within limits, of course... since everyone has them. Places like photobucket, and bunches of avatar hosts, who will give you the direct link to their pictures for use in forums and the like. Now, if your link somehow exceeds their limit, they may shut down the picture temporarily until the usage rate is back within the limit.
So, consider this..
If you have a web site, with pictures being hosted on it, and you link to one of those pictures for use in a forum, you are still hotlinking... but not really stealing, because its your own site.
If you see a picture on someone elses site, and they tell you no, your hotlinking to it is stealing their bandwidth.
If you see a picture on someone else's site, and they say its ok, your hotlinking to it is still hotlinking, but with the owners permission. so its not really stealing, because you have the permission to link.
All in all, if you don't want to "host" all those pictures yourself.. ask them to make up their own photobucket account and hotlink to them, themselves. Its not that hard to do.
definition example 1 from free-hosts.
Definition 2 from wiki
Definition 3 from the urban dictionary.
help info on YouTube for embedding vids on other sites.
Photobucket's definition (which allows 25GB a month in bandwidth usage, btw.)
