The one thing I really hate when I need to upload a photograph (for my profile, or here, a header image for the new theme I’m trying out) is that I have to upload it.
Most of my photos are online. I can find them in Flickr way faster than on my hard drive. And the connection between the server and Flickr is most certainly better than my crappy ADSL upload rate.
Why can’t we have “Provide URL” as well as “Upload Photo” in all these cases?