
Originally Posted by
Clint1
They both have merit. If you're talking strictly about SEO purposes, the text link is better, obviously because it has text which is searchable/indexable. A bot cannot parse nor see any text that's part of an image so they are useless as far as that's concerned.
A banner will get someone's attention more quickly and could warrant a click-through. And if they are used (as Clay mentioned) you should use the alt="" and title="" attributes because they'll have some SEO use.
If you can, use both. If you can only use one, then use a text link and be sure the link text is very descriptive with your search words in it.
As far as HL'ing is concerned, if bandwidth is a problem you should get a host with unlimited bandwidth (and space). Most have that these days and don't usually cost any more. If you can't or don't want to move, the site which links to you should copy and upload your banner to their server and link to it that way.
Where ever your images are found, regardless of it being your site or another, each time the page is viewed that size of your image(s) is added to your monthly bandwidth.