I did a litle more research and hot linked one of my own images from a few forums. It's nowhere in image search so far.

Also I re-visited the hotlinking forums and it looks like one of them has moderated the pictures into a text link. My image search findings might therefore conform to what everyone else has found - ie surrounding text, inbound text links etc....

Mind you, an image that's interesting enough to be hotlinked might well be a good thing to put at the top of image search. I'd not be surprised if Google were to alter their image search algo to reflect this at some point in the future.

In the mean time I'll keep having fun with hot linkers: http://www.renault4.co.uk/gallery/index.php?cat=10002