It sounds like you have inserted your image in a container field. Try just copying the image and then pasting it onto your layout (in layout mode). Then apply the button to the image using Format>Button Setup….
If the corners of your image are not right angles, then your image might be displayed on a white or black background on the iPhone. You can either edit your image before pasting to add a background of your choice or upgrade to FMP 12 to correct this artifact.
Thanks for your answer. My Icon is not in a container field, its right in the middle of nowhere on the layout. I've tried copy and paste and it gave me the photoshop icon with the name of the file on the bottom.
Did you first open it in Photoshop, select all the image and then copy it from there or just copy it from your desktop? I've had good results opening the image.pgn from Photoshop in the Preview application and copying it from there but that is on Mac OSX.
Save the photoshop image to disk as a png.
Use Insert:Picture and locate the image file on your disk and select that file and click OK.
Filemaker does its thing and the icon should look just fine.
I learned the hard way that screen captures using Snaggit should not be copied directly from Snaggits Editor but first saved to disk as png. Why, the difference in image size which was 2,000K vs 200K or less.
Also, Photoshop may say png but the working image is still the megasized Photoshop image in Photoshops proprietary format.
Finally found the problem. !!!! wooh ooo ! I needed to uncheck the " Store only a reference to the file" when doing the " Insert - Picture". It's working now......