Directly from the Photobucket website:
" If you have a free account, there is a cap on your maximum image size. Images are compressed to fit the 1MB / 2048x1536 size limit at the time of upload."
I did a search on Photobucket Image compression and there are a ton of unhappy/cheated customers (pro and free users). Apparently around Feb 2009, without informing its customers, Pbucket changed/lowered the bandwidth limits for displaying and linking images. So what you see on the web are the highly compressed versions of your images. For Pro users, they will still store your un-compressed images and make them available for you to re-down load, but you are basically just paying for file/picture storage. Anything anyone else can view through links are displayed at a much lower resolution.