Editing theme images

You have to modify your theme's code. Replace something like this:

<img src="<?php bloginfo('template_url'); ?>/images/header_1.jpg" width="970" height="140" alt="<?php bloginfo('name'); ?> header image 1" title="<?php bloginfo('name'); ?> header image 1" />

with this:

<?php editable_image( 
	'header-1',
	get_bloginfo('template_url') . '/images/header_1.jpg', 
	array(
		'width' => 970,
		'height' => 140, 
		'alt' => get_bloginfo('name')
	)
); ?>