As for the web hosting you could use TroxxHosting.com and the best Image Hosting script out there is Scripteen Free Image Hosting
i have image hosting site on unlimited bandwidth and storage. somehow the image uploading on websites and image views are very slow. i read that it is advisable that use VPS hosting with minimum 512 ram. any comments? by the way, any cheap and good VPS host?
To do this properly you are going to want to start with a dedicated server and a good bandwidth plan. No reputable host is going to let you do this in a shared environment. Those that do, either do not know what they are doing, or will just take your money and run. There are an enormous set of requirements in terms of cpu time and bandwidth when it comes to providing image hosting. That said, be prepare to spend between $300-$500/mo. or more depending on the server and bandwidth package you require. Anything less than this, and you are either going to suffer some real performance issues, or you'll find your host dropping you like a rock once their network and customers begin suffering as a result. Hope this helps.
As your website grow you can upgrade to a more advanced service such as a VPS or Dedicated server but for now I suggest that you stick with the Shared Hosting
Make sure you go with a host that's not overslling. Your type of site is actually going to use the allotted services (Web Space, Data Transfer) and won't sit easy with most oversellers.
you can find a good non-oversold VPS for cheap price ($10) at WHT, and the script you can use is DPI 1.1 Final. Myself using this script, I personally like it more than mihalissh image script. The script will be releeased the V.2.0 soon
Since you are starting off, shared hosting is fine. Once you grow out of shared hosting, move to a VPS or dedicated server.