What's my best option for using images on my Wordpress.com blog?

I'm using Wordpress.com for a blog.

I notice that I have the option to upload images into my gallery and so I can obviously select from those when posting to my blog.

But with only 3GB available for storage with the free WP.com account, am I better off just using remote images (copying & pasting external photos from my HD or the web) when posting or should I upload images that I will want use ahead of posting to the gallery and just select from there? Is there any difference in terms of layout or appearance?

(I must mention that for now, until I get a hang of WP.com I won't be upgrading to WP.org so what I can do with WP.com is what I'm interested in doing)

Also, I'm not sure what the term "remote image" means exactly. Let's say I'm posting an essay about my favorite band and I find the perfect image on Google for it. If I were to copy & paste that photo into my post, would that be using a "remote image?"