As an IT guy, I have to be real anal now. Their "3rd party Hosting" definition is completely wrong. Photoboucket is a host. When you link to PB from another site, that other site is the client. Therefore, PB is the 3rd Party Host. They are calling the client the host. Which is wrong And it bugs me. LOL!
I didn't link many of my photos anyway. I mostly used it as a backup. So the change doesn't effect me much. I just don't trust internet storage with my only copy of something.