The image does appear but it has the additional code underneath it.

Any suggestions?

That is because you are not putting the full image tab (from the first < to the > ) in to be replaced so the extra stuff is being spit out. Put the full image tag in there.

I'm not sure what you mean. Can you give me an example ?

Well, what does the image normally look like in the page source? Like this:
<img src="sss/yyy/image.jpg" alt="" border"0" />

Then that is what you need to put in the replacement manager. You never said what you put in as the code to be replaced. (You only showed us your replacement code.)

O, I see what your saying.

And unfortunately I really can't answer that question. I think it's one of those things you need to evaluate yourself. See what your loads are like and what your bandwidth usage is like before making the change, and then evaluate it after making the change.