I'll try and help you in the forum so everyone benefits from the walk through.
You have your image that you want to use as a logo.
The filename is
yourfilename.jpg or
yourfilename.gif
Upload this file into the xcart/skin1/images directory by FTP.
Go into your xcart admin (login as master or whatever) and click in the right hand side menu on Edit Templates.
In the list of folders and templates, locate
head.tpl.
Look for this line (approx 4th one down)
Change xlogo.gif to the name of the logo file you uploaded. Change the pixel width and height attributes to match your file.
Save and go look at your front end. BINGO!