The most straightforward instructions for you -- modify your templates to have the image tag in place of the MTBlogName tag.
Another way to do this (if your templates are using the default headers) is to set up the background in your CSS.
CODE
#banner { background-image:url(http://your-site.com/image.gif); background-repeat: repeat-y;
width: 500px; height: 300px;
}
#banner h1 {display:none;}
Setting the width and height will force the area to stay open even with no text in it.
You can read more about the background properties on
w3cschool's CSS Background pages.
Hope that helps,
Kristine