Hmm. Let's say you have 64 possible characters you can use in a password and four different images. You look over someone's shoulder and see that they go "RGBYYBRYG".

What this means is that you can now reduce your search space to approximately 16^9 passwords instead of 64^9 passwords. Which is probably very helpful if you have stolen the password hash, but not if you have to guess it by entering the password manually.