If the paragraph's background is transparent, then it is likely that the image will be visible through the content of the paragraph. Far more important to understand is the handling of adjacent vertical margins. This happens due to the collapsing of adjacent vertical margins. When two margins are precisely adjacent to each other along the vertical axis, then the smaller one is effectively reduced to zero. You should also know how collapsing effects negative margins.
Any negative margin is added to the maximum of any positive adjoining margins.
There is the possibility of floating an image to one side of an element, and then using a negative top margin to pull it upward in the page. This could be used, for example, to make sure an image which occurs at the end of a section will appear within that section. Since there's no clear statement on whether or not this will happen, it's safe to assume that different browser will react differently. On the other hand, you can use negative margins to make elements wider than they otherwise could be, or to cause an overprinting effect. You'd probably use these effects rarely, but you may have some design need for it.