CpILL, I actually managed to get images imported quite easily from custom generated XML. This is what I have in my XML:
<image>
<path>/var/www/html/import/trd_carbon_emblem.jpg</path>
<alt>TRD Carbon Emblem</alt>
<title>TRD Carbon Emblem</title>
</image>I created a directory in my web root (html) called import for all the product images and made sure I had permissions set to 755. I'm also running the bazaar code from about 4 hours ago.
Hope this helps.