OK, I don't have the book with me right now, but what you need to do, essentially, is to work out where you want to store your image file. E.g. let's say it's in the same folder as the page it appears in. So, for example, you might have a folder on your computer containing these two files:
The index.html file is the page you want the image to appear on. To make it appear on the page, you have to link to it in your page code, like so:
<img src="diver-circle.jpg" alt="A diver circle image">
Then, when you double click on the index.html file, it will open in your browser, and you will see the image on screen.
This isn't the exact code as in the book, but as I say, I don't have it with me now. I recommend you read through Chapter 2 again, because I'm sure it describes what to do here.