Any ideas on how Google indexes images?
It does not seemed to be the file name - that would be too inefficient and open to abuse.
AFAICT they run their search engine over the page and weight terms based on proximity to the image, esp in table cells adjacent to the image.
I agree with Philo. If you do an image search, just look at the page that the image was found on and you can see that sure enough the word(s) you searched for are somewhere in the page, or in a page that linked to it.
Their image algorithm usually works well, but Google News will occasionally have a funny mixup with the wrong news image and article summary. :-)
They might not take advantage of this fact, but they could use the fact that many images appear on different sites with different scaling/cropping, etc.
Fog Creek Home