Is it necessary to include alt in images

You set the alt attribute of the <img ...> tag to make the image accessible to people who are using screen readers. Decorative images (such as backgrounds and bullets) doesn't need a description (it would just be clutter to the visually impaired person using the screen reader), but if you - for instance - got a graph, you should describe the information conveyed in the graph. If you need a lot of text to describe it, then you use the longdesc attribute to link to a separate file that describes the image.

alt attribute is required for <img> tags if you want your markup to validate. Background images and bullets are just cosmetic, they don't need an alternate representation as they are not part of the content.