Drupal - How can I add a cancel button to the content add form for a single content type?

I would use the following code.

function mymodule_form_my_image_node_form_alter(&$form, &$form_state) {
  // If the node is being created, redirect the users to the page where
  // they can choose the content type for a new node; otherwise, redirect
  // them to the page showing the node.
  $destination = (!isset($node->nid) || isset($node->is_new)) ? 'node/add' : "node/{$node->nid}";

  $form['actions']['cancel'] = array(
    '#markup' => l(t('Cancel'), $destination),
    '#weight' => 20,
  );
}  

Notes

• markup is the default form element type; there is no need to use #type = 'markup'.

• In the node edit form, all the buttons are inside $form['actions']. The weights used from the buttons that form is using are 5 (Save), 10 (Preview), and 15 (Delete). I used 20 to show the link after those buttons, but you can change its weight to show it in a different position.

  // Add the buttons.
  $form['actions'] = array('#type' => 'actions');
  $form['actions']['submit'] = array(
    '#type' => 'submit', 
    '#access' => variable_get('node_preview_' . $node->type, DRUPAL_OPTIONAL) != DRUPAL_REQUIRED || (!form_get_errors() && isset($form_state['node_preview'])), 
    '#value' => t('Save'), 
    '#weight' => 5, 
    '#submit' => array('node_form_submit'),
  );
  $form['actions']['preview'] = array(
    '#access' => variable_get('node_preview_' . $node->type, DRUPAL_OPTIONAL) != DRUPAL_DISABLED, 
    '#type' => 'submit', 
    '#value' => t('Preview'), 
    '#weight' => 10, 
    '#submit' => array('node_form_build_preview'),
  );
  if (!empty($node->nid) && node_access('delete', $node)) {
    $form['actions']['delete'] = array(
      '#type' => 'submit', 
      '#value' => t('Delete'), 
      '#weight' => 15, 
      '#submit' => array('node_form_delete_submit'),
    );
  }
  

• There isn't the need to use arg() to understand if the form is for editing an existing node, or for creating a new one. I checked !isset($node->nid) || isset($node->is_new) is TRUE, to verify the node is being created. Drupal seems to simply check empty($node->nid), even though node_object_prepare() uses !isset($node->nid) || isset($node->is_new).

• If $_GET['destination'] is set, the link added with l() will point to that path.

Each node form has its own unique id. It's consisted of node type's machine name followed by _node_form. So your my_image node type's form id is my_image_node_form

Here's a mock untested function (D6) to illustrate how to implement:

function HOOK_form_alter(&$form, &$form_state, $form_id) {
  $types = array(
    'my_image',
  );

  foreach($types as $type) {
    if($type.'_node_form' == $form_id) {
      if(arg(1) == 'add') {
        // If adding node link to node/add screen
        $link = l(t('Cancel'), 'node/add');
      }
      elseif(arg(2) == 'edit') {
        // If editing node, link to node view screen
        $link = l(t('Cancel'), 'node/'.arg(1));
      }
      $form['cancel'] = array(
        '#type' => 'markup',
        '#value' => $link,
        '#weight' => 0,
      );
    }
  }
}

If using Drupal 7 then change #value on the array to #markup.

All those solutions are for adding Cancel link not a button!

If you want to add the button instead of a link you should use this code for module cancel_button.module:

function cancel_button_form_alter(&$form, &$form_state, $form_id) {
    // node types for which Cancel button should be added
    $types = array(
      'biography',
      'faq',
      'draftlaw',
      'vocabulary',
      'draftlaw_page',
      'encyclopedia',
      'user', // if you want to add user's edit form too
    );

    foreach($types as $type) {
        if($type.'_node_form' == $form_id || $type.'_profile_form' == $form_id) {
            $form['actions']['cancel'] = array(
                '#type'   => 'submit',
                '#value'  => t('Cancel'),
                '#access' => TRUE,
                '#weight' => 55,
                '#submit' => array('cancel_button_form_cancel', 'node_form_submit_build_node'),
                '#limit_validation_errors' => array(),
                );
            }
        }
    }

    /**
     * cancel_button callback.
     */
    function cancel_button_form_cancel($form, &$form_state) {
        $link = '';
        $path = 'node';
        if('user_profile_form' == $form['#form_id']){
            $path = 'user';
        }
        if(arg(1) == 'add') {
            // If adding entity link to [user|node]/add screen
            $link = $path . '/add';
        }
        elseif(arg(2) == 'edit') {
            // If editing entity, link to node view screen
            $link = $path . '/' . arg(1);
        }
        $url = $_GET['destination'] ? $_GET['destination'] : $link;
        drupal_goto($url);
    }