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

<logo translate="label comment">
<label>Logo</label>
<comment>Allowed file types: jpeg, gif, png.</comment>
<frontend_type>image</frontend_type>
<backend_model>adminhtml/system_config_backend_image</backend_model>
<upload_dir config="system/filesystem/media" scope_info="1">theme</upload_dir>
<base_url type="media" scope_info="1">theme</base_url>
<sort_order>1</sort_order>
<show_in_default>1</show_in_default>
<show_in_website>1</show_in_website>
<show_in_store>1</show_in_store>
</logo>

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');