Keep your ALT text to less than 50 characters if possible - You can't use markup in ALT text, so it's going to display as one long continuous line, to the right of your cursor. If your ALT text is too long, it may run off the right hand edge of the browser display. In addition, some validation programs will generate an error if they judge your ALT text to be too long
Supply empty ALT text (ALT=" ") for non-meaningful images - The concept behind ALT text is to provide the same meaningful information to non-visual users as received by visual users. Using "decorative widget" as ALT text for fancy bullets doesn't convey anything meaningful, and will probably annoy the non-visual user.
Example code for empty ALT text.
View your pages with images turned off, or using a text browser or an equivalent. This will give you an idea of what a non-visual user will get from your page. Is the information you want to provide still coming through? Can the visitor still get to the parts of your site that you want them to see? From "Simple guidelines on using ALT texts in IMG elements": "Consider what the page looks like when images are not shown. Then, write for each image an ALT text that best works as a replacement."
If you can't describe your image in the limited length provide by the ALT attribute, then provide a descriptive link, or "d-link." This approach provides virtually unlimited space to describe it. Eventually, the HTML LONGDESC attribute of the IMG element will serve this purpose, but it is not yet universally recognized by browsers. It is probably good practice to include LONGDESC entries for those images that would benefit from them, but for now, you'll have to go the extra step to make sure that everyone can benefit from your images.
Use the ALT text to convey the same information as was intended by the image. For example, if you are using an image of an arrow to provide page navigation, an ALT text of "right arrow" may not give the user the information they need to understand that what you REALLY mean is "next page." Another common mistake is to insert the file name and size into the ALT attribute.
Include redundant text links for image map "hot spots." Text browsers do not recognize links in image maps, even if an ALT attribute has been provided. Here is an example of a redundant text link.
Remember to provide ALT text for buttons as well.