I’ve been playing with a trial version of blog editting software. So far it is the most advanced editor I’ve found. It is called Elicit and has some advanced WSIWYG features that include integration with technocrati, flickr, del.icio.us, google, yahoo, amazon (associates & search), furl, and bloglines. It also supports several blog engines including livejournal, wordpress, moveable type, blogger, typepad, and more.
Using Elicit you can pretty much drag content in from your browser (including pics) and it will copy the content into your post and create the appropriate links back to the original content. If you do copy in a picture you can easily resize the photo so that it looks more natural in your post. If your blog engine supports picture uploads (like wordpress), elicit will automatically upload any photos you drag in from your computer. Pretty sweet little utility.