How to vertically align text next to an image?

Actually, in this case it's quite simple: apply the vertical align to the image. Since it's all in one line, it's really the image you want aligned, not the text.

<!-- moved "vertical-align:middle" style from span to img -->
<div>
  <img style="vertical-align:middle" src="https://placehold.it/60x60">
  <span style="">Works.</span>
</div>

Tested in FF3.

Now you can use flexbox for this type of layout.

.box {
   display: flex;
   align-items:center;
}
<div class="box">
    <img src="https://placehold.it/60x60">
    <span style="">Works.</span>
</div>

Here are some simple techniques for vertical-align:

One-line vertical-align:middle

This one is easy: set the line-height of the text element to equal that of the container

<div>
  <img style="width:30px; height:30px;">
  <span style="line-height:30px;">Doesn't work.</span>
</div>

Multiple-lines vertical-align:bottom

Absolutely position an inner div relative to its container

<div style="position:relative;width:30px;height:60px;">
  <div style="position:absolute;bottom:0">This is positioned on the bottom</div>
</div>

Multiple-lines vertical-align:middle

<div style="display:table;width:30px;height:60px;">
  <div style="display:table-cell;height:30px;">This is positioned in the middle</div>
</div>

If you must support ancient versions of IE <= 7

In order to get this to work correctly across the board, you'll have to hack the CSS a bit. Luckily, there is an IE bug that works in our favor. Setting top:50% on the container and top:-50% on the inner div, you can achieve the same result. We can combine the two using another feature IE doesn't support: advanced CSS selectors.

<style type="text/css">
  #container {
    width: 30px;
    height: 60px;
    position: relative;
  }
  #wrapper > #container {
    display: table;
    position: static;
  }
  #container div {
    position: absolute;
    top: 50%;
  }
  #container div div {
    position: relative;
    top: -50%;
  }
  #container > div {
    display: table-cell;
    vertical-align: middle;
    position: static;
  }
</style>

<div id="wrapper">
  <div id="container">
    <div><div><p>Works in everything!</p></div></div>
  </div>
</div>

Variable container height vertical-align:middle

This solution requires a slightly more modern browser than the other solutions, as it makes use of the transform: translateY property. (http://caniuse.com/#feat=transforms2d)

Applying the following 3 lines of CSS to an element will vertically centre it within its parent regardless of the height of the parent element:

position: relative;
top: 50%;
transform: translateY(-50%);