To take advantage of the MEDIA_URL in the settings.py file for hosting your static media on a separate server, you need to do a
little internal work on your templates and some work to make that setting available to the templates.

Inside a template, where you would normally have:

{{{
blah blah <img src="/img/foo.jpg" alt="this is a foo"> blah blah..
}}}

You would instead insert {{media_url}} so that it would look like:

{{{
blah blah <img src="{{media_url}}/img/foo.jpg" alt="this is a foo"> blah blah..
}}}

It generally requires a big search and replace the first time you implement it. After that, seeing other
references in the templates has been enough to remind me to use {{media_url}} before any static content.

We could pass {{media_url}} in through each view, but since we'll want it throughout the site, it's often easier to
set up a simple context processor to do the heavy lifting.

Here's a example snippet from a context process:

{{{
from myproject import constants
from django.conf import settings

def common(request):
    ctx = {}
    ctx['constants'] = constants
    ctx['media_url'] = settings.MEDIA_URL
    ... more stuff here ...
    return ctx
}}}

Then in the settings.py under TEMPLATE_CONTEXT_PROCESSORS, we added:
   "myproject.context_processors.common",

and from there, the MEDIA_URL in settings.py became available in all templates as {{media_url}}.

Note: There is a default media context processor since revision 5379 and will be included in version 0.97 once it is released.  See http://code.djangoproject.com/changeset/5379.  You can access using {{ MEDIA_URL }} in your templates.