PicApp is a service that lets you embed legal images on your site, and now you can do it with a shortcode on WordPress.com as well. There’s a demo video in the WordPress.com announcement post, and another one on the PicApp blog. There’s also a plugin for stand-alone WordPress users, which is nice obviously.
Oh, and while we’re at it, WordPress.com got a revamped theme viewer as well. You might want to check that out too.