Hi Mushu,
Welcome to JavaRanch!
Java is a strongly typed language, meaning that every variable has a data type associated with it. The line
Img1 = getImage (getCodeBase (), "Img1.gif");
doesn't declare what type the variable "Img1" has. It should be
Image Img1 = getImage (getCodeBase (), "Img1.gif");
(given that you add a "import java.awt.Image" up at the top.)