BeeDeeDubbleU - 6:09 am on Oct 5, 2010 (gmt 0)
I think that while the image approach would clearly be sending content signals to Google the text link would still be preferable. Actually that's what Google tells us...
"Use mostly text for navigation
Controlling most of the navigation from page to page on your site through text links makes it easier for search engines to crawl and understand your site."