Ok I only know a little about computers so I need some advice.

I know the picture has to be hosted some where, I thought I could host it on a home made site on yahoo.

when I produce a front page it then said that the could not be used for linking to other sites.

So any ideas please treat me gently

I use this webpage.

And there are a load of others, too, such as Photobucket.

Surely your ISP allows you to have some web space? It is standard practice these days, and for example Tiscali allocate 50Mb to their customers, more than enough for most people.

Have a look at your T&C.

Your own webhost for your disco site should have more than enough free space Pete.
All you have to do is upload the images, but keep the links out of public view - ie: don't put them on your site.
You can also create a password protected area as well if you wanted.
Photobucket and Imageshack as mentioned are also very good photo hosts.
It all depends on what you want, and what you want it for.