I design websites. I want to make a website where users can upload photos in gif/jpg/bmp format.

I know php and its simple commands/functions by which i can let the users upload photos. But the problem is that I don't know the security concerns and hassles associated with letting the users upload their photos. (I host my website in a server which is managed by a hosting company.)

Well, there are a variety of very complicated issues involved in what you are proposing. First off I would recommend that you have full control of the website from domain name down to the hardware that it is running on with no middle man. Then I would recommend you go talk to a lawyer and iron out all the contracts you need to present to users before they start uploading anything to you and all the rest of the legal advice and counsel you will need.

If you can not or will not invest in your own hardware for the project then talk to your hosting company first.

And please go see a lawyer and get fully educated about the perils involved in this venture.

i've done this in ASP but php should work the same, just desginate a folder for uploads and give it the appropriate permissions for writing, you probably want to limit the size if possible