Open the following file - views/default/page_elements/header_contents.php - and edit line 23(ish)

<div id="page_container">
<div id="page_wrapper">

<div id="layout_header">
<div id="wrapper_header">
    <!-- display the page title -->
    <h1><a href="<?php echo $vars['url']; ?>"><?php echo $vars['config']->sitename; ?></a></h1>
</div><!-- /#wrapper_header -->
</div><!-- /#layout_header -->

so what must i change it to lets say if i had main_logo.gif in the _graphics part of the website and wanted that to be the site logo where the text currently is

<div id="page_container">
<div id="page_wrapper">

<div id="layout_header">
<div id="wrapper_header">
    <!-- display the page title -->
    <img src="/_graphics/main_logo.gif" align="right">
</div><!-- /#wrapper_header -->
</div><!-- /#layout_header -->

You will probably have to change the height of the header in the css (/views/default/css.php)

add a favicon  to the root of your site

So do i just add a file called favicon.gif to the root of my site? i tried that and it didnt work :/

It has to be an icon file "favicon.ico" there are tools that can create a icon file from a regular gif, jpeg or png file... search online, you will find them