$z=0$ is mapped to $f(0) = \infty$. For $z \ne 0$ we have with $w = \frac 1z$
$$
|z-1| = 1 \iff |\frac 1w - 1| = 1 \iff |w-1|^2 = |w|^2 \\
\iff |w|^2 - 2 \operatorname{Re}w + 1 = |w|^2 \iff \operatorname{Re}w = \frac 12 \, ,
$$
where we have used the formula
$$
|z_1 + z_2|^2 = |z_1|^2 + 2 \operatorname{Re}(z_1 \bar z_2) + |z_2|^2 \, .
$$
Therefore the image is the (extended) line
$$ \{ w \mid \operatorname{Re}w = \frac 12 \} \cup \{ \infty \} \, .$$
If you are familiar with Möbius transformations then you can argue that the image of the circle
- must be a line (because Möbius transformations maps circles to circles or lines, and $f(0) = \infty$),
- pass through $w = \frac 12$ (because $f(2) = \frac 12$),
- be orthogonal to the real axis (because Möbius transformations preserve angles and $f$ maps the real axis onto itself),
and that leaves only the (extended) line $x= \frac 12$ plus the point at infinity.