replace "3 cubes" logo with custom logo image

hi all, new here - saw a couple threads that look close to my question topic so am writing directly to the people to see if they can help... but in the mean time thought i'd post here too.

i am trying to put my company logo in place of the default logo that comes with the theme but can't see how. i see the "logo.gif" in the "show logo image" box and the option to leave it blank, which i did.

but i want to put my own logo image in there. I want it to be next to my blog title and tag line as the theme's default layout for this area. i am guessing i should put something in the Logo Area: Styling box? also to what directory/location do i upload the logo's image file so that it's accessible?

here's my blog so far (just a shell, much to do) http://www.companionnaturalpetfood.com/wp
thanks in advance for any response.
stacy