This week's book giveaway is in the OCPJP forum. We're giving away four copies of OCA/OCP Java SE 7 Programmer I & II Study Guide and have Kathy Sierra & Bert Bates on-line! See this thread for details.
You'd need to encode the image into characters, maybe using something like base64. Then the image becomes regular ASCII that can be stuffed into an XML document. You couldn't do anything else with the image until the encoding has been reversed, though. Before doing this I'd consider at length if there isn't a better way to store the image (maybe as a file, with the file path in the XML).