The upload size options affect the linked out web image size as well as the image size that is kept on file in your Photobucket account.
You can also find a link to customize upload sizes under your user settings in the 'album' tab. The link is located just above the 'Album Privacy Settings'.
Once you click on either of these links, you'll encounter the upload size options pop-up, letting you choose your default upload option.
You're presented with several options. Select the size that you'd like your photo to be displayed, both on Photobucket and linked out from Photobucket. For instance, if you select 800x600 and upload a photo, that photo will then display at 800x600 within your Photobucket account. Also, when you link out that photo, it will display at 800x600 wherever you've linked it out.
Effects are not retroactive for previously linked out images. Updating this option does not affect images you've already linked out, only those you decide to link out going forward.
The size options for linking out include: