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Hahaha... that's hilarious. I was sure this was another of those cases where IE was to forgiving and tried to guess what the user meant but it turns out that Gecko and Opera 7 also supports this. I haven't got a clue why... going to bugzilla... nada... google... no. MSDN does not show it. All browsers treat it internally as an img element (opera finds it under the tag name image as well).
I guess the only reason this works is that NN2/3/4, IE3/4/5/6 or some other ancient browser supported this at one point.