Since all templates have their own structure of css-Files, this chunk is special to the Milkyway template. Have a look below or at category:templates for other templates.
The new logo image should have the same size as the original joomla image. (You can get the image size by checking the image property from the browser page info menu item. this hint is applicable if, you are using firefox)
background: url(../images/mw_joomla_logo.png) no-repeat;
background: url(../../../images/your_logo.png) no-repeat;
This chunk should cover the process for the benefit of someone without prior experience of Joomla! or PHP, HTML, CSS. It should suggest a suitable tool to use to create a new image and should show a step-by-step procedure, with annotated screenshots, of a new image being created using an open source image editor such as The Gimp. It should then show, again with annotated screenshots, the process of uploading the new image to the correct location within Joomla!