XML

XML is designed for storing textual rather than binary content and you'd normally store a file path or url from which the image could be loaded or downloaded rather than the image itself.

However, it is possible to convert an image to a byte array and then encode that as a Base64 string so that it can be stored in an XML file. You can then retrieve the Base64 string and reverse this process to recover the image.

.NET contains a couple of methods which are useful for this purpose:

http://msdn.microsoft.com/en-us/library/system.convert.tobase64string.aspx

http://msdn.microsoft.com/en-us/library/system.convert.frombase64string.aspx