Yes, most search engines, including Google, look at your ALT tags when indexing your Web page. For many sites, particularly image-heavy sites, ALT text is one of the few elements available for the search engines to index. If your page has no text at all on it, it can still get a high search engine placement by using ALT text.
The overall impact of using ALT tags, in terms of search engine optimisation, is low. As they have become abused (like meta tags ) by webmasters who fill alt tags with streams of keywords, the major search engines have lowered the importance of ALT tags in their algorithms. However, ALT tags are a required element for standards-based HTML coding. Every image must have an ALT tag, and each ALT tag must be properly implemented.