I remember when someone was copying my Avatar, lucky me, I have it on my own server, so I went ahead and changed it to a bloody looking Garfield...
Its usually just best to put a link to the image, and not use the img tags, that way, you arent wasting bandwidth of the other server when someone accesses the page, and dialup users arent going to hunt you down with pitchforks and torches (we know they want to, though)