What it does:
Adds an image to the Form Folder. The image does not automatically appear in the form but it can be referenced in other pages or by fields within the form itself e.g. the Rich Text Field can be used to include the image within the form.
<Edit tab> notes:
An image is similar to a page in that it has the usual Edit sub-tabs of Default, Categorization, Dates, Creators, and Settings. Thus, for example, it can be excluded from the navigation* list of the form.
*A navigation list will appear under the Form Folder if an image (as above) or a page is added to the Form Folder's content.