There’s an update available for Windows Live Writer. This update, KB 951125, fixes the following 4 problems:

• An error occurs when you publish a post that contains images to Blogger:
Because of a change in the Picasa image-hosting service, Windows Live Writer cannot publish posts to Blogger that contain images. Instead, you receive the following error message:

File Upload Failed: Object reference not set to an instance of an object.

This update restores the ability to upload images when you post to Blogger.

• You cannot publish images to your Windows Live Writer album on Picasa if the folder already contains 500 images:
If your Windows Live Writer album on Picasa contains 500 images when you try to upload images to your blog, you receive the following error message:

File Upload Failed: The remote server returned an error: (500) Internal Server Error.

This update fixes the problem by creating a new Picasa album when the preexisting album becomes full.

• When you click a thumbnail image to view a larger image, a file download box appears:
When you click an image in a blog from the Blogger Web interface, the image typically appears in a new browser window. However, when you click an image that was published through Windows Live Writer, the file download box appears instead of a new browser window.

This update fixes the problem for new posts by creating image links that display the image in a separate browser window.

• Link to images that were previously published to a blog in the blogspot.com domain are broken when the blog is migrated to a custom domain:
When you migrate a blog from the blogspot.com domain to a custom domain or you configure a blog to use FTP publishing, any images that were previously published to the blog through Windows Live Writer are missing from the blog and the links to the images are broken.

This update fixes the problem for new posts by creating image links that work on both blogspot.com and on custom domains.

Those of you who have automatic update on will receive this update automatically. If not please visit Windows Update to get this update and end your frustration when publishing to Blogger. Picasa service is the default setting for images that are published in Blogger.

The Windows Live Writer build number (Help > About..) after this update is 12.0.1370.325.