yeah if you've got it connected up you can just upload direct from the game.
for me to connect the 360 to the net is a lot of hassle due to furniture and connection points etc that's why i just photo'd off the TV.
the paint tool is really good but you have to think abstractly sometimes, you just get a bunch of premade shapes (vinyl decals) like circle, triangles, square, curve etc that you can change the size in x and y axis and skew and differ the colour and transparency. it takes quite a bit of work but you feel dead chuffed when you get it.
for example that bender is about 90 shapes to make his head arm and the circle. you can have a thousand shapes per part of the car. left, right, front, rear and top.
buy it, you know you want to
