Images should have alt-tags without fail. Here's the quick skinny as to why:

1. Bots cannot read images, but they can decipher the embedded alt-text associated with them.

2. Many web users may be visually impaired and unable to see the images, but the "tools" they use for surfing will read to them the text in the alt tag.

Yes, it is true that over use of the wrong or non-relevant text in the alt-tag can be regarded as spam, but appropriate usage can boost rankings as well as assist bots and visually impaired people in appreciating your site.

By the way - have you read what the search engines want directly from their sites and guidelines? Relying solely on other people's best guesses will lead to more speculation and trouble, whereas getting it "straight from the horse's mouth" will be invaluable. To that end, you should really check out these free resources AND see what Google has to say about WebPositionGold ... you'll be surprised; if not alarmed!

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W. R. Mineo