Creating an image sharing site could be done only by using free and open source script, that what I believe. In order to have this service I was trying several script including cloned version of imageshack.us which are not satisfying and keep searching for another script. Finally I found 4images Image gallery management system that developed by 4homepages.de.
4images is a powerful PHP/mySQL web-based image gallery management system. Features include comment system, user registration and management, password protected administration area with browser-based upload, HTML templates for page layout and design, search engine and a lot more. 4images is free for private and non-commercial use.
By using the integrated template system the design and layout can be customized easily. 4images is multilingual: an external language file can be used for translation in other languages.
More features are: RSS feeds, search engine, automatic thumbnail generation, extensive user administration, upload function for users, showing IPTC and EXIF data of images, rating of images, spam protection, protection against hotlinking, newsletter function, e-cards, integrated database backup function, etc.
However for our free image hosting service, we’ve modified this script to open the hotlinking protection feature.