Can Search Engines read Graphic based Navigation Links

Navigation Links

[clampett]

I have been told that search engines can't read graphic based navigation links, so it is imperative to have text based navigation links.
Surely the spiders (or whatever they are) read the HTML code, and if the HTML code for a graphic based link contained code such as "href=http://www.mydomain.com/page2" then wouldn't the spider recognise that?
Admittedly my web tool generates more code for a graphic based link, but both graphic and text links have the href parameter which points to the web page in question.

[Sinner_G]

Depends what you mean by 'read'. Spiders will follow the link on a graphic, but of course won't be able to read what the graphic says, so you are loosing on link text.

This is important for e.g. external links pointing to your site. If you are linked to by a text (say 'widgets'), then this will improve the chance of your page being found when a user is searching for that term.