Replace existing image with new image

I am having a problem replacing an existing image in a template I am using with a new image.  I delete the current image then go to the icon to add a new image.  It will let me select a new image from my uploads and click okay but then it does not show up in the next screen for me to save it.  Is there another way to change the image.  I would think it should be simpler than having to create a whole new template each time.