I'm looking for a shared host that will allow hosting of a image hosting site. Can anyone recommend one?
If you are going to do image hosting you are really going to want to get a dedicated server. No reputable host is going to allow image hosting in a shared environment.
Till his image host will get really big he can easily use a shared host that is not OVERSELLING... keep in mind that oversellers will not allow him to host image hosting sites...
Yes, A VPS Server would suit your needs. plus there is no thread of suspension as in case of shared hosting.
.... if you don't have anything constructive to post then just don't post at all dude. Read again the OP... he's looking for a service to host his own free image hosting site, he's not looking for a free image hosting site.