affiliate link img code

what is the purpose of the img code in text link?

[netsites]

I'm new to affiliate programs and putting together linkshare program for a client of mine, and wondering how to handle the following situation.

The linkshare text link looks like this...

<a href="http://click.linksynergy.com/fs-bin/click?id=#*$!#*$!#*$!x&offerid=99999.10000000&type=3&subid=0" >Get 20% off this fancy computer!</a><IMG border=0 width=1 height=1 src="http://ad.linksynergy.com/fs-bin/show?id=#*$!#*$!#*$!x&bids=99999.10000000&type=3&subid=0" >

My client wants affiliate links to appear as user-friendly links like...

[myclientssite.com...]

so, I was thinking about coding "product#*$!x.php" as such..

<?php
$url = "http://click.linksynergy.com/fs-bin/click?id=#*$!#*$!#*$!x&offerid=99999.10000000&type=3&subid=0";
header("Location: " . $url);
exit();
?>

My first questions are:

Do I still need the <IMG... > piece of code? Why do they have this?
If so, how would I incorporate it into this coding scheme?
Does linkshare or their merchants cancel affiliates if they use this hidden url technique?

Thanks in advance for your input.

[eljefe3]

That img code is usually a call to a 1 px image used for tracking stats, but I have taken this out on a few programs and just left the actual affiliate code in.