I understand that. Rather than replacing the image, he can redirect hotlink requests to another image. For example, here's a picture of President Bush hosted on tripod.com, http://gov-east.tripod.com/sitebuildercontent/sitebuilderpictures/.pond/george-w-bush.jpg.w180h236.jpg
They don't allow hotlinking, so you'll normally see the red X or an image which say's no hotlinking. A lot smarter than linking to porn, imo.