You have to upload your image to an image host or if you already have web space you would put it there. I used photobucket.
click on your template of your blog and find the line that says 'start header'
this is what the code for my header looks like:
<!-- start header -->
<div id="header">
<h1 id="blog-title">
<img src="http://img.photobucket.com/albums/v381/luvmymutt/DANIB_banner.gif">
</h1>
<p id="description">Scrapping and other goofiness!</p>
</div>
<!-- end header -->
preview your blog before publishing it, I save a backup of the template before totally messing it up
I am NOT an expert and just learning code but hey this worked for me