Yep, you're definitely headed in the right direction. I'm doing something like this at work where I'm generating images on the fly using GD::Image. Basically, I have one script that is the main page. It reads in data from a file and for the graphics, it calls a second script in the HTML img tag and passes data to it just like your img tag has. That second script uses the CGI module to read in the values passed to it, creates an image, applies binmode, and then prints the image. Basically, this is doing what kcott described.

In my case, I'm dealing with less than 10 images that are "gauges" of the latest readings, which are collected every 15 minutes. Also, the page isn't viewed very often.

Try it out. If you encounter any problems, just come back and ask for help.