First of all these image hosting websites are done to death now, so you should integrate a nice design in website to make it look different from other websites. Play with header/footer a little bit. The best way to get your image hosting website popular would be to register yourself on some forums (non tech/general chat/wallpaper) and do some postings there with the images hosted on your website. A good idea is to catch a latest event/controversy (britney-maddona kissing or maybe that superbowl incident of Janet Jackson, these are old just giving you an idea) and post the pictures of the same on the forums. People really digg these things. You can do this yourself or hire somebody to do these postings for you.
Well Said Sumitbahl, Blissallstar, I think you should make your website more attractive and colour full. As fas as seo is concerned, your title is not so good. You should have keyword rich content. Start your site with directory and article submissions. !!! Enjoy !!!
Do you mean he should hotlink to some of his own images? If you mean something else, do you think posting like that and hotlinking to images on your own site is a good or bad idea, out of interest?
You can upload a thumbnail on a forum with it linking to the image on his website. So, that traffic is generated. Hotlinking would only consume bandwidth, thats it.
The site is clean looking and simple which is great. The only things I would change would be the logo and maybe use a second color to bring the new logo and the site together, perhaps green and blue would work well.