Image optimization for SEO plays an important role in ranking of the site & also traffic. Images with big size affects the loading of the website. Google gives more important to content. Also try to minimize the use of flash. With HTML5 coming, sites are beginning to use it.
Some of the tips which help in Image optimization are 1) Use the Right sized image to load faster 2) Use keyword rich alt text. 3) text surrounding the image should be also keyword rich. 4) Also png files should be used. 5) Back links from external sites to the images. 6) Providing a HTML embed code.
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From archive: November 2010 X