Yes, you can trace your image and EQ will turn it into templates or paper foundations.
It's really a great piece of software for all the cool stuff you can do with it. The ability to print foundations and templates is worth its weight in gold - I'm doing that Barbara Brackman BOW and a lot of the blocks aren't suited to an 8" finished square, so without foundation or templates, you've got to fiddle with eighths and sixteenths. (Yuck!)
But, it's also absolutely wonderful to have the yardage figured out for you! And your rotary cutting! Both of these charts have little snippets of your exact fabrics right there on the page, too. :) Very, very cool software.