Inside LCD graphics.  Pictures are 176x185 or 200x200.  Both seem to work. 

To Use -  Right click on the image and choose Save As... and save it to your computer.  Then either open up a web-based e-mail address you have (yahoo, or gmail, or hotmail, AOL won’t work) and send the file to 6311234567@vzwpix.com (when 1234567 is y our phone number.  This only works with Verizon.  And yes, it costs 25 cents, or a picture message.
Or buy the data cable, and download Bitpim, and go into the file system tab and expand the dload folder, go into img and right click on an existing picture (one you took) and hit overwrite.  Then find the picture on your hard drive and umm... overwrite it.