There are different ways to make annotations over figures in LaTeX. The advantage of using annotation is that you get the annotation with the same font of the text, enhancing the “look and feel” of the text.
You can define anchors in the eps file, export a pdf figure with the text without font, … or you can use the packages that LaTeX makes available to you. In this example we will see how to use TikZ to make simple annotation on a simple jpg image.
This package requires the use of pdfLaTeX. An alternative to this package can be PSTricks, but it will not be discussed here.
TikZ is a very powerful package (the manual has 726 pages (version 2.10)) and can also draw shapes, arrows, … and basically whatever you want. It takes some time in the first experiments, but finally it will become easy!
Mirko Daniele Comparetti