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The ChromeEye extension uses the image search engine TinEye, whose technology allows you to find exact copies of images (including scalings and slight distortions).
Version 0.1 of ChromeEye (updated: now latest version) basically mimics the TinEye bookmarklet behavior, i.e. it lists all images of the current page with links to TinEye results. Let's hope Google Chrome allows for editing the browser context menu soon, so you can right click and select a "Search Image on TinEye".
Meanwhile, you can download the latest version of ChromeEye directly from this link, while the complete source code is available on GitHub. So until the oficial TinEye plugin gets released, have fun with this easy solution.
Update 14 December 2009: ChromeEye now has a page on the google chrome extensions site. Version 0.2 was also released, with a nicer logo.
Update 17 June 2011: ChromeEye is now called Reveye and it includes different search engines, such as Google, Tineye and Cydral.