Depends on the skin you are using. Since I'm guessing at 'custom' since it doesn't use a header image it (of course) won't call for one in the style sheet. I think you'll need to edit the style sheet to use your image as a background image. So the thing to do is kinda copy what you see in a different skin with a header image. evopress uses one, so that would be a place to look for details on how.

A very easy way to add a banner to skins like "custom" and other skins who don't use banners in their default design. I'm surprised this is ever mentioned in SET UP INSTRUCTIONS since MOST people want to use banners!

In the folder "skins", look for the page "_html_header.inc.php" and open it with a text editor like Notepad.

(At the very bottom you see the following comment)

<!-- Start of skin_wrapper -->

(After this comment, copy and paste the code below, then change the file name of the image to yours and change the parameters to your own. Make sure the image you use for your banner is in the folder "img".)

<p align="center"><a href="http://www.MY-WEB-SITE.com" target="_blank"><img border="0" src="img/MY-BANNER.jpg" alt="MY Blog" width="800" height="150"></a></p>
</body>

Interesting... I suppose some folk would want to use an image, but others might want a background image and still others might be into no image.

Anyway another easy solution is to use the "blog logo" widget :)