The Image Library Manager (ILM) is part of the WordCruncher Publishing Toolkit. To get the ILM, install the Toolkit. In order to add images to WordCruncher books, you need to first import them into the Image Library Manager to create an ETGU file, and then embed the images from the ETGU into your ETAX file.
The Indexer generates an ETGU file, which can be opened into WordCruncher as a graphic. Most often, you will want to embed an image from the ETGU file into a WordCruncher ETAX file.