I’ve also tried to use the From URL feature by uploading my images to Flickr and then coping the URL. It always says "error: Invalid File". I’ve even tried clicking share on Flickr and pasting that link to yield the same results. If anyone could enlighten as to just what it is exactly that I am doing wrong, it would be much appreciated.
You have to upload the photo to a file sharing photo site, then you have to copy and paste the link. Does that make sense?
I personally use imgur.com
2) When you use the From URL tab to embed an image hosted somewhere, remember to uncheck the option "Retrieve remote file and reference locally" (found just under the text-area where you should put the link to the image).