I have to agree with tedster - it depends on your intentions. I find the simplest balance and check method is read it aloud. If it reads like a logical sentence, fine. If not, questionable.
As for images, if the images are not words, you can have text links with background images and get the same effect, more or less. I, as others, often use a background image and put the text link centered right over top. Kills two birds with one stone, so to speak.
And as for "alt" and "title" the "alt" should describe the image and the "title" should describe what it does. The "alt" tag is designed to appear when an image does not download. It was not meant to serve the purpose of a "title" tag as IE displays it. Also remember, in a text only link, there is only the title tag.