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I cant see why google would have a problem with this.
The text will not be read, and you wil not dilute your content with legalese (sp).
Ultimately, its your website - not googles. :)
<added>Why not give people a small text image saying "subject to the terms and conditions found here" then link to a page with the legal text or image?</added>
But why do you want to include the text as image in the first place? Wouldn't it be more reasonable to just use text, and apply some style to make it smaller? Then you would be on the safe side regarding legal position, having the page display quick, server traffic, text-to-speech browsers/ non-image browsers, and so on.
By including an image, you might actually put *more* emphasis on it than less. People might see it loading, get confused why text loads like an image, then they might not be able to read it because it's too small, then they might try to copy the text and fail, and so on. Just do HTML as intended and you won't run into trouble!
I have some large blocks of text that I want to reproduce on every page of my site for legal disclaimers etc.
Is it ok to reproduce each block as a graphic image rather than text that the bots can read. Would this pass a manual review. Is there nything wrong with doing it. I want to stay squeaky clean.
Sure you can, and it will pass a manual review. But I don't think the leagal disclamer will hold up i court. Think about people with text-only browsers, screenreaders etc.
It might be better to include the legal discamers with php or serverside includes.