ImportImagePlugin:

This Plugin makes use of the Geotools library to provide a method to 
import spatial referenced images into JOSM.

Basically, the plugin import function needs:
- the image file (Supported formats: GeoTiff, Tiff, jpg, bmp, png, gif)
- a world file (<image_name>.wld (or other extensions like ".bpw" for BMP files, ".tfw" for Tiffs))
- a projection file (<image_name>.prj) with a WKT-representation of the source projection for this image

If no world file can be found, the plugin cannot continue.
If no projection file can be found, the plugin asks to use the DEFAULT reference system,
which can be set either in "<APP_DATA_DIR>/JOSM/plugins/ImportImagePlugin/pluginProperties.properties" file
or in the layer-properties dialog after a layer is created.

For a more detailed documentation you may visit the WIKI-entry for the plugin.