This feature can be used to free-form trace lines over pictures of things that you paste onto your model. I was asked about this in reference for Solidworks so that's the center of this tutorial here. When using Inventor, there's an "insert image" command in the sketch menu, and it's straightforward from there.
Solidworks:
This will only work while you're currently in sketch mode. As an example I'm working on this Autococker body which can be seen below. The sketch you want to edit is the plane that you plan on inserting the picture onto (I assigned a random sketch plane in the model for demonstration). Select the sketch picture... command in the menu listed here:
After that happens you'll be expected to locate the file in the popup window. For demonstration I will use this picture of Shocker eyes that I have in my "upload files" folder.
Once the file is selected, it'll import onto your sketch plane. You cna use the properties menu at the right to adjust the size of the picture as needed.
The only detail here is that, since you're working in an abstract environment, the program doesn't know the scale for the picture you've imported. This can make it difficult to scribe down functional parts that need to be an exact size. This is therefore best for drawing logos, text, and similar things. It can be used for functional things but you'd have to be really exact with it if so.
The only real time I've used this successfully was when creating my new "fracture cube" ZDS logo. It looks a lil something like this:
Here's the final version that I actually use...
