How to remove LOGO from 3.5.1?

I am using WP 3.0, FF browser, latest version of theme as of 6-29-10.

I cannot seen to remove the logo and replace the header image with my own no matter what I do. I tried in Header Styling and just left %image, but then everything is removed including the site title and the content area background.

I did read http://forum.bytesforall.com/showthread.php?t=7681 and do what it said there, but it did not work correctly.

I just used this theme on a client's site a few weeks ago, but since the upgrade everything seems different.

It could also be that I am sick with the creeping crud courtesy of my husband and 5 year old, but it is just not connecting. Can you please walk me through this?

I can get a background in just fine, it's the header I am having issues with. I just want a header to go to the top of the blog and the nav bars underneath.