David,
Yes, the Image Viewer can be used to assign an alternate image to an element. If you use the element on multiple diagrams you must set an alternate image on each instance.
I am attempting to model our server infrastructure. I am creating a single instance of each server in a single package called servers. I am then using this item in multiple packages to categorize the use of the server, (ie, test, development, what project it's used in, virtual versus physical, etc.)
I want to use a different icon to represent what type of server it is, (application, database, data warehouse, etc.) It would be nice to be able to assign a specific image to the server type stereotype. Using this technique I would only have to do it once.