"Two reason was stated in "A Note on Lena" by David C. Munson. First, the Lenna image contains a nice mixture of detail, flat regions, shading, and texture that do a good job of testing various image processing algorithms. It is a good test image! Second, the Lena image is a picture of an attractive woman. It is not surprising that the (mostly male) image processing research community gravitated toward an image that they found attractive. "

http://www.ee.cityu.edu.hk/~lmpo/lenna/Lenna97.html