A lot of discussion has been going on at one of the threads at the Google Groups as to how one should use the alt attribute and title attribute for the web page images. Google explains that one should use them as per W3C recommendations.
JohnMu from Google explained how to use both the alt and title attributes:
- alt attribute should be used in describing the image.
- title attribute should be used when the image is serving as a hyperlink to a particular page.
As the Googlebot does not see the images directly, we generally concentrate on the information provided in the "alt" attribute. Feel free to supplement the "alt" attribute with "title" and other attributes if they provide value to your users!
So for example, if you have an image of a puppy (these seem popular at the moment 
) playing with a ball, you could use something like "My puppy Betsy playing with a bowling ball" as the alt-attribute for the image. If you also have a link around the image, pointing a large version of the same photo, you could use "View this image in high-resolution" as the title attribute for the link.
There is the Official Google blog post on using alt attributes as well.
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{ 3 comments… read them below or add one }
Image ALT Tag is best use for a website related to pictures, I never tried doing this techniques using typical informational product.
ALT tags ARE important because they surely improve the website usability.
if you dont use your alt tags it will be harder to get to the next pr ranking