OK its not really a Web2 tool but its the one I first started using outside of Office and still very effective. Free software to download. has a range of quiz types:
Fill in the blanks
Multiple choice/multiple select
Crossword task (my favourite)
Has some really good admin features too in terms of setting timings, scores etc. Also has the benefit of linking to Moodle.
Adding images is a bit of fankle and best done using the picture URL link.
See on hotpot.uvic.ca