image optimization is the process of driving traffic to a site via image search, which is voluminous these days, but as Terry says it is mostly fairly useless traffic.
we've been experimenting at length with it for a while now, tests indicate that image size and speed of loading are fairly unimportant in rankings.
You need to include alt text, but images can also rank from almost any words on the page, the closer to the image, the more likely those words will be come ranking kws for the image. and they definitely rank from kw hits in the page titles and URL too.
the main ranking factor apart from that seems to be the strength of the page itself, and anchor text links aimed
at the page will improve the image's rankings
