It's pretty easy actually:
• Open Google Earth
• Click "Add" on the top toolbar
• Click "Image Overlay"
• Click "Browse..." and select your image
• Click the "Location" tab further down the window
• Enter 90° 0'0.00"N, 180° 0'0.00"E, 90° 0'0.00"S, 180° 0'0.00"W in the North, East, South, and West boxes respectively
• Click "OK"
And that's it!
I use it loads since you can use the ruler to measure direct distances. Even better, you can create polygonal paths and see the lengths of those too - perfect for planning trade routes, roads, etc.
Edit: Forgot to mention, biggest res is 10000x5000 I think. It gets very pixellated when you zoom in a lot but it's better than nothing I guess. You can obviously add in as many smaller maps as image overlays as you like, so you could cut a much higher resolution into smaller pieces and fit them all in that way to get better quality. Would be interesting to see how well that works actually...
Another Edit: Apparently the max res is dependent on your computer. Mine is 16384 x 16384. Click "Help" > "About Google Earth" to see what the max size you can use for each overlay is