Absolutely not! It's used by screen reading software and other non-graphical user agents to render a description of the image as the users of this software type cannot actually see the image. So, for example, if you posted an image of a chart, the alt attribute might contain a short summary of what the chart shows. Or if you use a header image as a link to the front of your site, the alt attribute might say "Home" or something else short but meaningful.
In general, it's a "what to show when the image can't be shown" fallback. Google does take note of image alt attributes (after all, it cannot "see") but, again, don't use the attribute to keyword stuff. That won't go down well with Google or with disabled users who are then bombarded with spam-like text. Like The Force, use it wisely. :-)
It's also quite permissible to leave the alt attribute blank if the image is just a bit of eye candy with no actual informative value within the page.
Here's a very quick but useful test: imagine reading out a page on your site to someone over the phone. Do you have to stop to explain any images? If "yes", then those images should have short descriptions in the alt attribute. If "no", then those images can safely be left with a null (
alt="") alt attribute.