Having posted extensively in the Turn The Other Cheek forum, I can tell you the best way to upload images is to do it like this:
It looks like that's just what you did, @@iboomboom, but the other thing about this server's image upload feature is that it always scales images down to a certain pre-defined width if it exceeds that width. Unfortunately, it resizes the image, not just limits the dimensions shown in the post, so even when you click on the image to see the full-size version, you won't get it there either.
Maybe that's something could change at some point.
It's also worth mentioning that the XI website is on of the few that lets you upload images at all. Many force you to host your image elsewhere and then just link to it. Nothing says "aw, fuck that" like making you jump through hoops just to post an image. So thank you XI for letting us upload pics.