The image should be either a bmp or jpg file. The program will make the image 1" high and maintain the image proportions. Make sure that you check the "Use company logo on invoices and estimates" option in the Options | Printing section.
One last thing to remember is have your image saved on your computer's hard drive and not on a floppy.
It's likely that your logo file contains a lot of white space. This means that the graphic takes up only a small portion of the image. When Gopher goes to print the logo it will end up printing mostly white space. You might need to crop your image file in a graphics program.