Effects of incident illumination on phase-contrast images obtained by means of free-space propagation are investigated under the "transport-of-intensity" approximation. Analytical expressions for image intensity distribution are derived in the cases of coherent quasi-plane and quasi-spherical incident waves, as well as for spatially incoherent and quasi-homogeneous sources and some other types of sources. Practical methods for measuring the relevant parameters of the incident radiation are discussed together with formulas allowing one to calculate the effect of these parameters on the image intensity distribution. The results are expected to be useful in quantitative in-line imaging, phase retrieval, and tomography with polychromatic and spatially partially coherent radiation. As an application we present a method for simultaneous "automatic" phase retrieval and spatial deconvolution in in-line imaging of homogeneous objects using extended polychromatic x-ray sources.