I received a lot of inquiries about this; how to add an image/logo into the header of my FTW or FTW2.0 theme. I figured it will be much easier to write one tutorial for that.
Method number 1

First of all, you need to edit the header.php file. Look for a line with this code;
<h1><a href="<?php echo get_settings('home'); ?>/"><?php bloginfo('name'); ?></a></h1>
Now, add this line of code BEFORE the previous code;
<img class="logo" alt="logo" src="http://www.yoursite.com/logo.jpg" />
You should change the location of the image to you own URL source. So the whole thing will look like this;
<img class="logo" alt="logo" src="http://www.yoursite.com/logo.jpg" />
<h1><a href="<?php echo get_settings('home'); ?>/"><?php bloginfo('name'); ?></a></h1>
You can link the logo to your homepage too. Use the same hyperlink as the <h1>
tag shown above.
The next step, open your style.css, and add this excerpt anywhere inside the file#header img.logo{
float:left;
margin-left:10px;}
The .logo class is maybe important, if you have other image in your header as well.
Method number 2

Or if you want to completely remove the title and replace it with an image, you need to follow this method.
Open header.php, look for this line of code
<h1><a href="<?php echo get_settings('home'); ?>/"><?php bloginfo('name'); ?></a></h1>
remove the <?php bloginfo('name'); ?> and replace it with this;
<img class="logo" alt="logo" src="http://www.yoursite.com/logo.jpg" />
As usual, replace the location of the logo to your own URL source. So now everything will look like this
<h1><a href="<?php echo get_settings('home'); ?>/"><img class="logo" alt="logo" src="<?php bloginfo('template_url'); ?>/images/logo2.jpg" />
The next step- open style.css, and add this excerpt of code anywhere;
#header h1 a img.logo {
border:none medium;}
And now your done!

hehehe.

03 Jan 08 | 4:04 pmthx for the tutorial flisterz. !!
This theme cool
10 Jan 08 | 9:04 amhi, flisterz, can you tell me how to add the menu bottuns
26 Jan 08 | 11:07 amthank you
waiting for your email….
oh, my email is : alison.xie@gmail.com
26 Jan 08 | 11:08 amhello flisterz, i still cant fix the logo in my header. hope you can help me fix this out. you can view it at www.pinoybro.com
21 Feb 08 | 7:41 pmnice. i will give a try first.
23 Mar 08 | 2:14 pm