It is similar to a link, in that the path to the graphic file must be included. The file is indicated through the SRC attribute. For this reason, the ALT attribute is available under images. ALT allows you to assign text that will be displayed in the case that the graphic will not be displayed. You don't need to worry about the text showing along with the image, only if the image can not be shown will the ALT text appear.
Images can also take a great deal of time to load.
There are Netscape specific options that will let you increase the efficency of loading pages with graphics. They indicate that space, of the defined size, should be pre-allocated for a graphic. The rest of the page can then continue to load while the image is downloading. The page will not have to wait for the image download to determine what size the image is. The image tag also has several other attributes that assist in the formatting of images.