Since I ditched the Address Book app on the Mac and decided to let G-Mail manage all my contacts, I figured out a pretty quick and simple way to update all of your contact images.
A Pop-Up will appear where you can upload a picture, unless you already know where that person's picture is on your computer you should click on "Web Address"
Step 3: Go back to your G-Mail page and Paste the link into the box (Command+V). Crop your Picture and Hit save.
I was able to update over a 100 contacts in just about a half hour or so. The good thing also is that since G-Mail is synced with my iPhone with Exchange, All the contacts are updated on the fly on my phone without syncing it to the computer.