Within the configure Theme panel there is a place where you can select a logo for your page and also the "favicon" logo that appears in the URL bar.
Home > Administer > Site Building > Themes/configure.
The default logo is the scary Drupal alien waterdrop.
I tried without success to get my Scrap Exchange logo in the title bar. I could not get what I wanted sized properly and in the proper position. The icon appears as the actual file size, there is no way to adjust once it's been placed. I may decide to try again once the rest of the site is set up, but had to give up for the time being.
I did get our logo to work in place of the scary waterdrop in the URL bar. For that, the image is auto-sized properly.
You just have to upload your logo file and it will appear. If it doesn't come in right, you can clear out the URL where it's looking for the logo and save settings to put it back to being blank.