Yes, the name of the image, as well as the contents of its ALT parameter, dictate how an image is indexed by both Yahoo and Google.

Yes. The way this works is that the html coding of your picture has an alternate tag feature where you can place text wordings. These might appear on a webpage for people who have their graphics off for browsing the net or have some other blocker for image contents that may slow their browsing (for slow computers and connections).

The html coding may look something like this:
<img src="images/picture1.jpeg alt="alternate text goes here">

You can place a keyword phrase in the altenate text area and name the picture (In the example it’s picture1.jpeg) by someother keyword also.

The key here is that you don’t aimlessly repeat words or phrases within the optional area. This is what is known as "keyword spamming" and will surely penalize you in the search engines.

People will do something like this:

<img alt="keyword, keywords, more keywords, even more keywords src="images/keywordsagain.jpeg">

Please don’t do that!
Besides for those who aren’t seeing your pictures it will look like some list of meaningless text on your website.

The common misconception is that it is a trick that will blacklist your website in the search engines. But it only beomes a dangerous practice when you do keyword spamming.

For more info on the right places to put keywords on your site
http://www.addtrafficnow.com/course.html
For more info on search engine optimization
http://www.seobook.com