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I can't answer your first question, but I can give you suggestions on your second.
First of all, I would change the layout. The colors are depressing and it looks old. I would also make a logo instead of a text link for the site. Changing the script to upload multiple files would be great as well. Also, the advertising shouldn't be TOO aggressive on the image page, it may make a current user turned off from your site in the (near) future. I uploaded a fairly large image and the Google Adwords advertisement covered a portion of my image in Internet Explorer.
I would prefer the name photohosting.com without the 's', so without taking traffic into account, I'd say $xx. My own personal opinion... I don't like the name photoshosting.com at all.
As far as changing the site, I'd do a complete redesign, something a little more pleasing on the eye!
I'm definitely no expert on increasing revenue on a site, but I'd say combine adsense with some affiliate links to get photos the user has uploaded, printed