Pictures from babylon mall don't work on ebay, and they don't work on yahoo auctions either. I am not sure what the techie reason is. Ebay may have a filter that weeds out photohosting from a selling site, etc. I did use html from the mall to ask a question on the ebay historical board about something once, and the photo was in the message, but was then gone.
I use the basic inkfrog package for any additiona photo hosting needs i have and have been very happy with it. it is not free, but it has been very reliable. They have a 2 week free trial if you want to try it out. Sometimes you can also host photos from your own webspace, but I am not quite there yet.
Chris