Direct request means entering the url of an image in your browser,
like you copy http//mysite.com/images/mypicture.jpg and paste it to the address bar.
Also some browsers view pages using direct requests, so if you disallow it some people [like me] will be unable to see images on your own site. You said you enabled hotlink protection and saw little red x's so I thought you're one of those people [like me]
btw, cpanels hotlink protection worked ok for me, never saw it suddenly "stopping working"
If hubby wants to use an image as his avatar you should add url of the message board to the 'Urls to Allow Access' box.