Hi - A word or two of clarification seems to be in order. A photo can only be "hosted" from a web site, not your PC. EXTERNAL hosting means that the photo(s) first must be uploaded from your PC onto a web site other than Auctiva, either your own web site or else another site that will host your photos. There are many sites, like Photobucket, that will do this for free. This will not save you time since you must still upload the photos to a site. It is easier to just upload to Auctiva and let Auctiva host the photos.
I would still advise that you edit your pics in a image editor, like Photoshop, to improve your raw pics by cropping, adjusting for contrast, color, brightness, etc. Many editors have auto-adjust for a minimum of hassle, but I prefer to do it manually for best control over the results. You will speed your uploading to Auctiva if you reduce the image size to 1024x768 pixels or less (otherwise Auctiva will do this for you during the upload, taking much longer), also reduce the image quality to 'Normal', or about 100KB file size or less, before uploading . This will give the fastest uploads and still retain good image quality. I personally prefer to upload pics at 800x600, which is what the buyers will see when they click on the smaller 400x300 thumbnail on the listing to 'supersize' it.
If you upload to Auctiva, which I recommend, then just set your account setting to hosting by Auctiva, rather than EXTERNAL. Then you will not get that URL pop-up box, but thumbnails of your photos uploaded to Auctiva. Just click on the thumbs. Much easier.