In Org-Mode Octopress Setup V2, which I am still reading to complete my setup of Org with Octopress, the author mentions the problems with links in Org-mode Integration.

After digging around, here is my solution for that issue. Basically, the Org already has facilities for URL handling, but these are deeply buried in the code.

As my org source files all reside in source/blog/ directory, all local references should be using path relative to this directory. E.g. for blog/a.org to refer to blog/b.org, ./b.org is all I need, for images in source/image, the link should look like ../image/.

Org can automatically convert org file link to html link, the gotcha here is: if the path is absolute, it would prefix it with file: in the final output. The relevant code snippet in ox-html.el:org-html-link:

;; If file path is absolute, prepend it with protocol
;; component - "file:".
(cond
 ((file-name-absolute-p raw-path)
  (setq raw-path (concat "file:" raw-path)))
 ((and home use-abs-url)
  (setq raw-path (concat (file-name-as-directory home) raw-path))))

But the relative link doesn't work reliably in the published site.

Use two Org export option:

#+HTML_LINK_HOME: /blog/
#+OPTIONS: html-link-use-abs-url:t

The combined effect of these two is to prefix all links with /blog/ in the exported files, an absolute path on site. I've set these in the global setupfile.org, but they can also be used per-file or per-subtree.

With these two options, locally you only need to write relative links and conversion to site absolute path is automatically taken care of.

The related ELisp source code snippet is in ox-html.el:org-export-define-backend part. Read the document on org-export-define-backend to appreciate these deeply buried features ;P