This feature isn't really new. It sort-of worked in X.1 for a single e-mail address per person and seems to go back all the way to the days of NeXT. Also, a similar feature existed in MacSOUP (and apparently other newsreaders or mailbox applications) for ages, and proved incredibly useful as it is much quicker to recognise an image than to read the sender's name.
As always it isn't clear why exactly Apple chose not to implement this feature themselves given that Mail can display the sender's image for certain messages from mac.com addresses, so adding the Address Book support should've been next to trivial.
Using this plugin makes my data-paranoia a useful feat: Keeping all e-mail addresses of people you know in your address book, really pays here (as well as for address book based junk filtering) – and having put the pictures their earlier 'because it's pretty' pays as well. Nice.
Received data seems to be invalid. The wanted file does probably not exist or the guys at last.fm changed something.