I've been searching for a plugin that permits me to paste images directly into a post. The default behaviour is the hideous data:url format that works, but is... hideous. This plugin at least saves the image into the default media folder with a short numeric URL in PNG format.
Shortcomings: There are no customization options that I can see: I would like to be able to set the name of the image being saved, and also to specify the exact location for it to be saved. Moreover, the image saved by this plugin is not recognized by the WordPress Media Library.
Despite these shortcomings in version 0.1, this plugin does just one thing very simply, which is a huge improvement on the default behaviour. It is perfect for pasting screen shots into WordPress.