This topic has been done to death, so I will simply point elsewhere:

• ALT texts in IMGs
  Uso dei testi ALT all'interno di IMG
  Excellent advice from the late Alan J. Flavell
• Web Matters - The ALT attribute
  Stephen Poley's comments
• Guidelines on ALT texts in IMG elements
  Jukka Korpela's comments

…and summarize:

• Always add an alt attribute, even if empty — It's necessary for validation.

• Ornamental images should have alt="" — Their absence doesn't reduce the coherence or function of the page.

• For navigation images, indicate the destination, or how it relates to the current location — Say ‘Next’ or ‘Previous’, or ‘Yoyodyne Inc’, or ‘Yoyodyne Inc Home Page’; definitely not ‘Yoyodyne Logo’.

• Exploit the other image attributes, title (perhaps for a caption, or an informal identifier) and longdesc (for a description of the actual picture.)

• For images that just contain text, use that text.

• For a vital image, explain it's value, and the cost of trying to obtain it,

• As a guide, if it doesn't make sense in a text browser, it's probably wrong — It will also be wrong for search-engine robots. Try it in Lynx or something.