This is an interesting tutorial, Jim. Thanks for providing it. And particularly, thanks for noting the errors which were apparently introduced into the latest version of the documentation. However, I would warn you and anyone else who would utilize this tutorial and/or the Image Search API in an application that the service has been deprecated since late May 2011. Per the deprecation policy, Google was slated to maintain the service for three years after the deprecation date. That three-year period has now passed, so the service's shutdown is, in all likelihood, imminent.
Please note that this is in contrast to your assertion in the tutorial that the API will move to a paid model. I am guessing that the confusion is the result of the Custom Search API (CSAPI), which utilizes a paid model and the pricing structure mentioned, supporting image search. However, while the CSAPI is built on a similar REST platform, there are significant differences between the old "AJAX" Image Search API and the CSAPI image search functionality.
Thanks again, Jim, for taking the time to write this tutorial!
jg