Alt Tags <alt> should be used.
An example of alt text would be when you hover your mouse over an image and 'words' appear. Alt tags were invented to be a service to the disabled so they could "see" what a image on the monitor looked like.
It's great news for SEO though, because as long as you don't "stuff" your images full of keywords, it's a great way to add targeted keywords to your pages content.
Spiders eat alt tags up because while they can't "read" an image, they sure can read an alt tag.
A great example of an alt tag is if there was a picture of a brown dog with spots, you would have alt tags for it that said "brown dog with spots".
ALT tags serve the following functions in seo and web design.
* Make sites accessible to the visually disabled.
*Describe images so that search engines and the disabled can see them.
*Allow keywords to be added to your pages with out cluttering them up.
*They should be used for every image on your site, within reason.