I am working with Squarespace right now, but I think Blogger is the the same in that you have to upload or link any photos you want to submit. It's not hard, it's just time-consuming and makes blogging about the pain in the ass of uploading images rather than the joy of sharing work.

I would imagine it would be flash-based? Something like a blog version of the bigFolio, Bludomain or Livebooks model is for websites?

Betsy was once telling me about a SUPER easy program that's a plug in for Wordpress... maybe if she's listening here she can fill us all in