I discovered it when I was attempting to view a pic on someone else's site and the original owner had replaced with a graphic that read, essentially, "This person is a thief who is stealing bandwidth from me by not knowing squat about the internets." That's actually a pretty polite response, considering some of the other hotlink-replaced graphics I've seen.

And then I had my own hotlinker, whom I tracked down with the help of StatCounter and Babelfish, as it was a Dutch website and I don't speak Dutch. I explained the issue as politely as I could (in Babelfished Dutch, which I'm sure was highly amusing) and they immediately removed the hotlink.

I don't think most people are aware of hotlinking, and most also seem to be willing to knock it off once it's explained, but there are a lot of idjits out there who just don't care.