As you might already know, Blogger is integrated with Picasa and all the images that you upload to Blogger automatically becomes a part of your Picasa account.Picasa has got 1 GB free Storage.So if your Picasa Account exceeds this 1 GB limit, you wont be able to post more images to your blog.(In that case you will have to buy additional Storage).
How to post large images in Blogger(Multiple Image Sizes in Blogger)
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