WordPress does not come with an easy way to just upload and display images in your sidebar (though it is expected to change soon in an upcoming version). At the moment if you want to add an image, then you need to add the HTML code for it.
First, you need to upload the image to your WordPress site using the media uploader and copy its URL.
Next, go to Appearance » Widgets page and add a text widget to your sidebar. Inside the text widget you will need to add the HTML in the following format.
<img src="Paste image URL here" alt="Alternate text" />
You can now save your widget settings and preview your website.