What is Alt Text?

Alt text, often times incorrectly called “alt tags”, is also called “alt attribute” or “alt description”. Alt text is important because it is the HTML code used to describe an image or video on your page. Good alt text should tell the user both the function and description of the given image or video.   

It is primarily used to provide understanding for visually impaired users that may be using screen readers as they browse.      
Secondly, it serves as replacement content if the image doesn’t load properly.    

Finally, if well done, it provides a more in depth description of why that content is being used. This results in being in the good graces of search engines through image indexing.
The Red Computer Mouse is the best computer mouse on the market

Alt text examples:

Horrible  img src="computermouse.jpg" alt=""     
Good        img src="computermouse.jpg" alt="Computer Mouse"  
Better       img src="computermouse.jpg" alt="This is a computer mouse"
Best       img src="computermouse.jpg" alt="The Comfort Mouse 200 will keep your wrist comfortable longer"

Additional info:

According to Google Webmasters, “Google asks that we use text rather than images to convey content.” Why? Because it is significantly easier to understand text than it is an image or video. Taking into consideration the main three purposes above, as well as Google’s request; we must make certain that the alt text uses appropriate keywords or phrases. It will guarantee that your content remains relevant when it isn’t showing. Lastly, if your alt text is inside of an < a > element, it should explain where the image links to.