Update: Also try SUPA, which is a great ready-to-use alternative.
The code lets you post images from your clipboard directly to the webserver to avoid the need to go through Photoshop or another image application.
When you compile your own applet using javac, you’ll need to sign it in order to be able to get access to the clipboard. (I have signed the applet contained in the zip and the certificate expires 6 months from July 19th, 2009, around January 19th, 2010).
If you find it useful or somebody else has already done this (and somebody surely has, but I didn’t have any luck finding it on Google), please write me in the comments.