Like Tom says, BLOB stands for Binary Large OBject. You also have the type LONGBLOB, wich allows more data to be stored (I'm not certain of the limits in any of them). However, if you are to insert a relatively large image in your DB, you should probably go for longblob.
You insert an image to your database just like you would insert anything else; with an INSERT statement. Consider this:
CREATE TABLE temp (
id int(11) default '0' not null auto_increment primary key,
image_data longblob
);
Then you could read the data from say a .gif file, and insert it to this table;
INSERT INTO temp VALUES ('', '<data-read-from-file');
At a later time, you can retrieve this data and do whatever you want with it. A popular choice when using php, is to output the header "Content-type: image/gif", and then simply print the image_data field from the database.