Image in sidebar

I'm trying to embed an image in the left sidebar. Expecting it to work when I used the "img src" html, but it doesn't - the "alt" is appearing instead. Which has made me realise that I've never actually embedded one there before.

Doing a Google search shows others with similar problems elsewhere and some folks who seem to have but don't post how!

Is there some obvious way of doing so?

Many thanks
Graham