Maybe I'm doing something wrong, but my experience is that pretty much every one of Dreamwidth's "featured styles" is now broken in terms of being able to display very large images in such a way that they are viewable within the frame. I didn't try them all, but I tried about a dozen of them and the only two that worked were Ivory Alcea (the one that guppiecat suggested) and another one by the same designer called Starflower.

Customizing journal styles on Dreamwidth is not straightforward. I sort of half-figured out how to do it once before, and ended up with a customized version of Blue by Wiring for Motion. That's the one that abruptly stopped resizing large images and became unusable. I'm curious what other people are using and if large image display is working for you. Customizing styles is so freaking cryptic on this platform that I would guess most people are using whatever was the default when they signed up. But maybe I'm just stupid and everybody else finds it easy and obvious.

After trying style after style and finding them all broken, I switched to Ivory Alcea, but really hated the layout  (no sidebars, just a series of ungainly horizontal boxes with way too much useless white space around them). Then I realized that you can start with any style and then change the layout to one of 7 pre-configured sets of boxes, almost all of which I liked better than the "no sidebar" choices. That made Ivory Alcea more or less okay and took only a few minutes. What took 2 or 3 additional hours was figuring out how to tweak the various "modules," move them around on the page, and get rid of the ones I didn't want. So now I've got a format I actually like better than the one I had before. But I am not a fan of the editing procedure, to put it mildly. 

However, I now know more about it than I did before. So if anyone else wants to, say, use one of the pre-configured styles but rearrange/add/delete some of the optional features, I might be able to help.

Huh. I see that Dreamwidth has added the ability to upload pictures to their site. Now what? How do you embed them in a post? Can they be resized when you do that? Linked to the larger picture, like I used to do on LJ?

Well, let's try this... I went to "View your images" Grid View, copied the "Embed" link under the thumbnail, went back to edit my post, shifted into HTML mode, and pasted in the Embed link.

OMG, that is awkward. Please tell me this isn't the only way.
On the plus side, it DID put in a smaller picture that links to the fullsize one in the back room.

 With some help from guppiecat, I managed to customize my DW feed so that posted pictures no longer sprawl promiscuously all over my monitor screen. It took way longer than it should have (which is why I put off doing it so long, I suppose), but now I have a striking teal-flavored Dreamwidth theme that I kinda like. 

Click on my account name and go take a look. It's adapted from an available theme just called "Blue" (a perplexing name, because IMHO the predominant colors are more green than blue. But if you like it, you can copy that same theme.)  

It looked like DW had imported all the pictures from my LJ account, but on closer scrutiny I see that it didn't do that at all - it just LINKS to the pictures on LJ. So if my old LJ account goes away, all my pictures are gone too. Boooo.

DW itself has practically no picture handling capability. They expect you to host your pictures somewhere else and link to them. There is some kind of limited photo-hosting capability, but you can only get to it... via email posting??? WTF?

ETA: I tried posting by email and it failed.
"Domain name not found: post.dreamwidth.com"

Oops. I typed the domain name wrong. It's dreamwidth.org.
Now it works, but it posted the picture in size ENORMOUS, even though I tried to send it as "best fit." I deleted that entry, and will try again.

Okay, I started an account at Dreamwidth and imported my LJ. As far as I can tell, I am all alone in the universe over there. Still trying to figure out where my friends went.

In the meantime, I think I found the cross-post-to-LJ setting.