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You are right that they suck because of really low conversions, but at the same you are right that it's free traffic. I got a few sales coming from images, but this is far from what I would get if all that traffic came from texual searches.
Anyway you don't have to do much optimization with images, just file names, alts and link titles, which I get automatically done for me by programs making bulk changes. So far most images have been getting indexed quite well for me
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