I have tried various URL paths and no matter what I put in I get my blogtitle instead of the image.

I have tried:

1. http://www.XXXX.com/wp/wp-content/up...7/bitch_f1.jpg
2. /wp/wp-content/uploads/2009/07/bitch_f1.jpg
3. /wp-content/uploads/2009/07/bitch_f1.jpg

Note: sitename changed to protect the guilty.

Obviously I am a complete novice at this.

1) What version of Atahuapa and WP are you using?
2) Have you read http://forum.bytesforall.com/showthread.php?t=321
3) Where are you puttig your url?

I'm using Atahualpa 3.4.1

Setting:
Header Area / Style & Edit Header / Show Logo Image?
Default: logo.gif

I uploaded my image using the wordpress media library page. Should I have used FTP and moved it to the theme directory?

Make sure you also have, in the Header area of the theme options, the %image showing, as in
%pages %bar1 %image %bar2, in Configure Header Area. I'm using 3.3.2.

I think there's sometimes confusion about the logo area and the image area.

I don't want to have images, just the logo to the left of my blog name.

Ahhh, the problems that occur when the wrong term is used.

when you said image, I assumed you meant the header image. But now I see you want a logo image
1) make sure you have %logo in ATO->Style & edit HEADER AREA->Configure Header Area
2) put the file name in ATO->Style & edit HEADER AREA->Show Logo Image?
3) FTP the file in the folder mydomain.com/wordpress/wp-contents/themes/atahualpaxx/images

Yeah, I was going to suggest the %logo thing too, once I understood he meant a new logo image, not an image image. :-)

Thanks, I had a feeling I needed to put the image in the themes directory, but I was hoping I could reference any URL.