If you are uploading your images to Blogger when you make your posts, there really is no other way to do it then how 40hz suggested...with a site ripper.
There are alternative ways to publish the images in posts, though. Windows Live Writer can be configured to upload any images you insert to your own FTP space that you have on some server, rather than uploading them to Picassa Web (what is used when you upload to Blogger).
If you wanted to export the posts to XML to import to another blog or blogging platform like Wordpress, the original links to the images on your own server would still work.
Something like this is good for 2 reasons:
1. You won't have to worry about hitting the file storage limits on Picasa Web, as long as you continue to have ample space on your web host to keep storing images.
2. It puts you in full control of backing up your stuff.
Something like this is bad for a few reasons:
1. You will probably always have to pay for the storage for even just a few images and you'll need a domain name if you want the image URLs used in posts to match, even if you change web hosts.
2. Not every web host is going to allow the hot linking of images that is needed to make this work.
3. You will need to make sure that your web host will provide you with enough monthly bandwidth to support the traffic your blog gets (and will get, in case of being slash-dotted, Stumbled, Dugg, or just mentioned in a high profile blog)
4. It puts you in full control of backing up your stuff, and if you don't and something happens, you are going to wish you left them all on Picasa Web.
5. Blogger doesn't support MediaRSS thumbnails for images not uploaded through the web based Blogger post editor. Only one gallery on Picassa Web is supported and you can only upload images to that galley through their post editor. Not even Windows Live Writer can access that gallery for uploading. (this can be an issue if links to your blog are shared on Digg and some other social media sites. Either the wrong image will be displayed, or no image at all.)