The most obvious SEO image tip for any website owner is that a picture should be surrounded by text that applies to the image being shown. Use a high quality image that has been optimized for the web so that details are still sharp when it appears as a small thumbnail on a search engine's pages.

Many people do not realize that the Google spider cannot read or see text or content that is on an image. Using the ALT attribute and providing a key-worded description lets you tell the search engine spiders what the image is referring to within the context of your post. The ALT attribute is designed to be an alternative text description for images. ALT text displays before the image is loaded in the major browsers and appears instead of the image in text-based browsers like Lynx. ALT is a required element for images and can only be used for image tags because its specific purpose is to describe images.

If you want your images indexed by the search engine spiders then give your images the full SEO treatment by adding the TITLE tag along with the ALT tag's description. A TITLE tag is what you see when you 'hover' over an image, or link, with your mouse. This hidden text that gets revealed on hover is a useful way of letting your readers know specific information about the picture, such as who is in it, where it was taken, etc.

According to Wikipedia:

Use the ALT tag description so that the search engines will index your images correctly according to the keywords and description you want associated with the image. In other words, if you do not provide an alt description, you are depriving your images of possible hits that could have come if it had been used and had included keywords.

Not sure how to add an ALT or TITLE to your HTML tags? You can look up just about any scripting or coding information for java, html, xhtml or css. etc at W3Schools ... click these links for the HTML for the ALT tag and for the TITLE tag.

It can take up to 6 months for the search engine spiders to find and index your pictures, but if you don't use the ALT and TITLE tags correctly, they will most likely miss indexing your photos altogether, and you will loose out on a traffic opportunity. Your website needs to get the most out of every page element. Use ALT and TITLE attributes wherever you can. They will increase your site's usability and expand your promotion options if you understand when to use them, where to put them, and why.