Adding an Image Upload Field to the Magento System.xml Configuration

<logo translate="label comment">
<comment>Allowed file types: jpeg, gif, png.</comment>
<upload_dir config="system/filesystem/media" scope_info="1">theme</upload_dir>
<base_url type="media" scope_info="1">theme</base_url>

The element represents the location where the image will be uploaded to. In the above example, the image will be saved to a sub-folder under the media folder. e.g. /media/theme/.

The element is used to rendering the tag.

To output the image from the above example, you could use the following code

echo Mage::getBaseUrl('media') . Mage::getStoreConfig('system_config_name/group/logo');