If you want to use a raster map image in a GIS program, it needs to be calibrated so that the software will know the geographic position of every pixel in the image. This calibration data can be embedded in the file, as in GeoTiffs and MRSID files, or external as in worldfiles. If you have a raster map image which doesn’t include this calibration data, you’ll need to create it yourself; this process is called “image registration” or georeferencing. There’s a number of free programs that can perform this function, and I’ve put together a list of some of them below; if you know of others, please let me know and I’ll add them. And if I’ve included a program that doesn’t do georeferencing (very possible, since I haven’t used all of them), let me know that as well and I’ll drop it from the list.
One thing to keep in mind: some of the programs only work correctly if the map image is already in a specific map projection like UTM or geographic, and you use the same coordinate system to georeference the image. As a general practice, it’s always best to use the same coordinate system the map was created in to georeference it. For example, if you have a map in the UTM projection, and use geographic coordinates to georeference it, the resulting calibration is unlikely to be accurate over the entire map (unless you’re at the equator). Some programs let you warp the map image to get it to match the coordinate system, a process known as “rubber-sheeting”; this is especially useful for those maps that aren’t drawn accurately, like old or hand-drawn maps, or maps created in no-longer-used coordinate systems.
BTW, I haven’t used most of these for georeferencing – GlobalMapper is my program of choice for this function. It’s not free, or even cheap, but it works great for georeferencing, including rubber sheeting. For beginners, I’d suggest looking at MapWindow, qGIS or MicroDEM first before going on to the more advanced software.
MicroMSI (link may be dead)
Online map rectification tools