I have seen a number of people asking at wordpress.com for a way to make the blog title appear as an image (logo). I found this very easy way to achieve that end.
Step 1 - upload your required image to a web accessible area
Step 2 - open header.php find...
<div id="masthead">
<h1>"><?php bloginfo('name'); ?></h1>
Change this to...
<div id="masthead">
<h1>"><img src="http://www.yapooh.org/wp-admin/images/image file name" border="0"></h1>
Upload header.php, overwriting the original, and you are done.
Demo can be seen at http://www.yapooh.org