Hello,

I'm about to launch a photo blog where I want users to upload and submit images without registration.

I tried to create menu item type: Item edit form, I allowed public and guest user groups to edit and create (Components > K2 > Parameters > Permissions tab), but when I click on menu item, it asks me for username and password.

Is it possible to allow guests to create new K2 item (from FrontEnd)?

Hello Bojan,
K2 requires registration in order to submit content. This cannot be changed but you can look for an extension at the JED which overrides this functionality.