This works for me.
Log into photobucket.
Upload photo. from the source file.
Photo should then load into PB with a resulting thumbnail view.
Clk. on the thumbnail to open it up in the main view.
On the right of this view look for "Links to share this photo". 2 options.
Clk. on the IMG option, a yellow "Copied" will flash up in the box.
Then go to your destination file eg "pprune reply"
Right clk. in the reply box and clk. on option "Paste"
The data display should then appear for the photo.
Go to "Preview post" to see the resulting photo.
I have just gone through this routine to produce the included example Photo. I took at Oshkosh in 2011.
PS As far as I know PB also auto sizes the picture to the required display size.
Hope this may help clarify things for you.
OPF