Page templates typically use a flat structure, with all images and HTML files stored in the same directory. The FrontPage Editor rewrites the links to images in the page whenever it is saved to a web or a disk file.
Web templates typically mirror the structure of a FrontPage web, with a subdirectory for images. This is so that references to images in the template web have the same relative path in the template pages as when they are uploaded to the web.
If a web template requires images, create a sub-directory inside the template directory called images, and place all GIF and JPEG files inside it. Make sure that all references to images in the template pages use the path prefix for images (such as images/logo.gif). You must also create a [FileList] section in the INF file, as described above, referencing the image files inside the template’s images subdirectory and target URLs inside the web’s images directory.