peewhy:
I've located the logo but can't edit it, or create a new one and save as same name.
Is there a facilities to change the permission allowing me to do so?
If your permissions are set correctly, there shouldn't be any problems. But of course, as with ANY files, there can NEVER be 2 files in the same folder with the EXACT same name. They must be slightly different. Just delete or rename the logo.gif (to logo2.gif) that's there now, and insert your new logo.gif.
Also, like obe1 said, if your going to be changing the design of your template, you should ALWAYS use the override instructions to help you create your own overrides.