Steps to Reproduce:
1) add widget to sidebar
2) upload new image
3) Fill out all fields on widget page
4) Inspect rendered source code
"Alternate Text" field should be inserted into the alt attribute for the image tag.
The alt attribute attached to the image takes its text from the "Title" field instead of the "Alternate Text" field. If no title is provided then no value is assigned to alt.
I could potentially understand the "Title" field being used in place of the "Alternate Text" field if the "Alternate Text" field was left blank. It does not make sense to have the "Title" field trump the "Alternate Text" field because they are doing two completely different things. The "Title" is displayed in the widget and it is not always desired to have text surrounding the image. The "Alternate Text" is intended for search engines, handicap support and unloaded images--as such it is very likely to have different more descriptive text than the title.