Basically, any time you put up an image on the web, you link to it with html (it goes 'img src="blahblahblah"'). The *right* way to do this is to have that 'src' be somewhere you control, whether its your own website or a photo account somewhere. But it's just as easy to put in a URL for that image source that is somewhere else entirely, so that every time that image shows, it draws on bandwidth that doesn't belong to you, and that's 'hotlinking'. And of course because its easy, stupid people don't realize how it can be bad.