Why can't i embed pictures above 3 kb? i see posts all the time with larger pictures...

What picture are you trying to embed?

Are you sure the site that hosts the images you're trying to link from allows deeplinking? A lot of websites disable this, because it uses their bandwidth to load that image on another site (usually if this is the case, the host in question usually replaces the image with a general placeholder mentioning this very fact).

I am pushing the "Post Quick Reply" or the "Go Advanced" buttons at the bottom and trying to imbed an image directly into the message I am posting from my computer. Mostly I am using this to request soundtracks and want to post a picture of the cover. All pictures are jpg. @Enkidoh...for instance if I save a copy of the picture you have on the post above and try to upload it from my computer...it gives me an error and won't do it because it is larger than I am allowed.

Most people upload to a site like photobucket. You're better off doing that and posting the IMG url instead.