I see two icons for uploading pictures - I tested one using photobucket - OK but what is the Hosting pictures about? Also how can I limit the picture size that people might upload? Getting there but still a few little odds and end to sort out. My language is English by the way.

The other upload image is another image hosting service similar to photo bucket for your members to use. I think you can set the size of uploaded images in your admin panel somewhere but i'm not sure where off hand. I may be wrong there.

if your talking about limiting picture size on gallery, its is posibble to do.

admin panel > modules > gallery > upload > adjust what size you want it & save

If you are referring to this () icon here, this allows your members to upload images to their ServImg account (also an image-host, like Photobucket). So every member has to create an account there first, before they can upload images. Therefore, they are hosting their images on their own accounts instead of using a general forum account. This also means there is no need to restrict the upload.